Dubai Group $6 Billion Deal Near Final Terms, Emirates NBD SaysArif Sharif and Stefania Bianchi
Dubai Group LLC’s $6 billion debt restructuring with banks should be agreed in the “next few months,” according to Emirates NBD PJSC, one of the biggest lenders to the investment company owned by Dubai’s ruler.
“During the fourth quarter, a new set of terms has been proposed,” Ben Franz-Marwick, head of investor relations for the bank, said today on an earnings conference call. “We believe that these are near final terms. We are hopeful that an agreement can be reached in the next few months.”
The bank is owed 4.6 billion dirhams ($1.3 billion) by Dubai Group and took a 950 million-dirham writedown on the debt in the fourth quarter, Franz-Marwick said. This brings Emirates NBD’s total provisions for Dubai Group to 2.51 billion dirhams, or 54 percent of total loans to the company, the bank said in an earnings presentation sent by email today.
Dubai Group, controlled by Dubai Holding LLC, is one of several companies in the state seeking to restructure loans that were arranged before property prices slumped and credit markets froze with the 2008 global credit crisis.
Royal Bank of Scotland Group Plc, Standard Bank Group Ltd., Commerzbank AG and Commercial International Bank Egypt SAE will be paid 18.5 cents to the dollar for their loans by Dubai Group to end litigation in the restructuring, two people with knowledge of the matter said on Jan 11. The company proposed last year to repay the loans in full over 12 years in the restructuring.
About 18 banks that were part of the same $1.5 billion syndicated loan have also been offered the deal or agree to the original 12-year restructuring plan, the people said. The lenders had until the end of the month to accept and litigation may begin again if the deal is blocked, one of the people said.