DUBAI, April 19 (Xinhua) — Dubai Group, the financial services arm of state-run conglomerate Dubai Holding, is in talks with creditors to restructure 10 billion U.S. dollars of debt, 4 billion dollars more than previously announced, an English daily of the United Arab Emirates (UAE) reported Tuesday.
The company aimed to restructure 6 billion dollars of bank debt alongside 4 billion dollars owed to other investors, The National quoted sources close to Dubai Group as saying.
The disclosure came amid improving investor sentiment in the emirate after Dubai World, another conglomerate owned by the government, signed a final agreement last month with its creditors on restructuring 24.9 billion dollars of debt, the report said.
Dubai Group is part of Dubai Holding, the conglomerate owned by Sheikh Mohammed bin Rashid Al Maktoum, vice president of the UAE and ruler of Dubai. The firm invests in financial services assets throughout the world and has stakes in some of the region’s major investment banks.
In November last year, Dubai Group’s missed payment on 1.83 billion dollars of debt maturing in 2011 and 2012 sparked restructuring discussions with creditors.
The higher liability figure for Dubai Group will come as a reminder that debts amassed by companies in the emirate during the boom years remain a problem, according to The National.
The increase in the size of the restructuring may result in further provisioning for the UAE banking sector, which had been expected to report lower impairment charges as banks begin to report earnings this week, the newspaper said.
Dubai is a member of the seven-strong federation UAE, the world ‘s third largest oil exporter. Unlike the capital Abu Dhabi, which has more than 90 percent of the Gulf nation’s oil reserves, Dubai’ s main revenues are from tourism, real estate, trade and financial services.