Dubai Said to Close Sheikh's Buyout Firm That Held $13 Billion

  • Dubai International Capital laying off staff, closing offices
  • Investment firm selling assets to repay $2.5 billion of debt

Dubai International Capital LLC, the ruler’s buyout firm that held stakes in companies from Merlin Entertainments Plc to U.S. hedge fund Och-Ziff Capital Management Group LLC and tried to buy Liverpool Football Club, is closing down after restructuring $2.5 billion of debt, according to people with knowledge of the matter.

Dubai International, set up in 2004 as an international investment arm of Dubai Holding LLC, is dismissing staff and closing its offices in the city’s financial district, the people said, asking not to be identified as the matter is private. The company plans to sell its stake in U.K.-based engineering firm Doncasters Group Ltd. in the next few months to repay almost $1 billion to creditors before halting operations, the people said.

At the height of the emirate’s boom years, Dubai International amassed overseas assets worth about $13 billion, including the Tussauds Group, owner of London’s Madame Tussauds waxworks museum, as well as stakes in Sony Corp. and Daimler AG. The company was later forced to sell most of these assets and reschedule $2.5 billion of debt when the global financial crisis froze credit markets and asset prices slumped.

Dubai International is fully owned by Dubai Holding, an investment company backed by ruler Sheikh Mohamed bin Rashid Al Maktoum. Dubai Holding has assets valued at about 130 billion dirhams ($35.39 billion) excluding land banks, vice chairman and managing director Ahmad Bin Byat said in November.

Dubai Holding said via an external spokesman that it took a strategic decision a few years ago to focus on generating maximum value from Dubai International’s existing portfolio and it will update the market as and when there is relevant corporate activity.

Liverpool FC

Dubai International made a number of attempts to buy British Premier League soccer club Liverpool under former Chairman Sameer Al Ansari, a self-professed Liverpool fan. In 2007, he lost a bidding war for the club when U.S. businessmen Tom Hicks and George Gillett agreed to pay 174 million pounds ($247 million) and take on 44.8 million pounds of debt.

The company reached an agreement in April 2012 with about 20 lenders, including HSBC Holdings Plc and Royal Bank of Scotland Group Plc, to delay payments on its debt. Lenders were to get 2 percent interest on about $2.15 billion of debt that will be extended for five years, while maturities of a further $350 million was extended for three years at an unchanged contractual interest rate, Dubai International said at the time.

Since the crisis, the company has been selling assets to repay its debt. Last year it sold German alumina products-maker Almatis GmbH to Turkish army pension fund Oyak Group. In 2014, it sold its stake in Dubai retailer Rivoli Investments LLC to Swatch Group AG and agreed to sell German industrial packager Mauser to Clayton, Dubilier & Rice for about $1.7 billion.

Dubai International’s management team is in talks to buy out Doncasters Group Ltd. with financial backing from Blackstone Group LP and Goldman Sachs Group Inc., people with knowledge of the matter said in October.