Dubai International Capital, the private-equity arm of the conglomerate owned by the emirate's ruler, has reached an agreement with creditors to restructure $2.5bn (£1.6bn) of debt, ending nearly two years of talks.
DIC, which has stakes in the UK-based budget hotels chain Travelodge and the German alumina products maker Almatis, will extend $2.15bn of outstanding bank loans by five years at an interest rate of 2 per cent. A further $350m in loans will be extended for three years, said Dubai Holding, DIC's parent conglomerate, which is owned by Sheikh Mohammed bin Rashid al-Maktoum.
The debt agreement marks another milestone in Dubai's efforts to rebuild its credibility with investors who fled the region after the state-owned conglomerate Dubai World shook markets in 2009 with plans for a $25bn debt restructuring. Dubai World had built up the debts during the boom years before the financial crisis. It reached a final deal with creditors in 2010, extending repayment over five to eight years.
Dubai International Capital gave no details on how it plans to repay the debt at maturity but the private equity firm has been selling down assets.
DIC's core creditors include HSBC Holdings, Royal Bank of Scotland, Emirates and Mashreq.Reuse content