Dec. 20 (Bloomberg) -- Al Jaber Group, an Abu Dhabi-based holding company with interests in construction, asked about 30 lenders if it could delay payments on around 6 billion dirhams ($1.6 billion) of debt by a year, two bankers familiar with the situation said.
The group, which has 16 billion dirhams-worth of projects in hand, hired KPMG LLP as a financial adviser to help change the terms of its debt, said the two bankers, who declined to be identified because the discussions are private.
Property prices dropped by more than half in Dubai and by 30 percent in larger neighbor Abu Dhabi as banks tightened mortgage lending and speculators fled the market during the global financial crisis. State-owned developer Nakheel PJSC, which spearheaded Dubai’s building boom, is seeking to change terms on more than $10 billion of debt and contractor claims.
“People are not getting paid and companies are trying to manage their working payments,” said Fadi Al Said, head of equities at ING Investment Management (Dubai) Ltd., said. “All contractors are dealing with liquidity issues.”
Al Jaber, which has assets of more than $5 billion, said yesterday that it’s talking to banks to alter terms on its debt and that it expects to reach an agreement next year. BNP Paribas, First Gulf Bank, National Bank of Abu Dhabi and Mashreqbank PSC are among those that have lent to the company, according to data compiled by Bloomberg.
Al Jaber “found it difficult to raise the appropriate finance to secure additional work and maintain its expansion in the region” because of the credit crisis, the company said in an e-mailed statement.
An Al Jaber official, who declined to be identified because of company policy, wouldn’t comment on the specific terms contacted by Bloomberg News.
The borrower, whose Al Jaber LEGT Engineering & Contracting (ALEC) LLC unit worked on Dubai’s Mina A’Salam hotel and the Kempinski hotel in the city state’s Mall of the Emirates, has at least $1.1 billion of loans that come due by 2014, according to data compiled by Bloomberg.
To contact the editor responsible for this story: Edward Evans at email@example.com