Abu Dhabi’s Al Jaber Said to Improve $1.6 Billion Debt Deal

  • Company has been seeking to rearrange debt deal signed in 2014
  • Al Jaber said to plan 5.2 billion dirhams in asset sales

Al Jaber Group, a family owned business in Abu Dhabi, has almost doubled the amount of cash it intends to raise from asset sales under a new debt repayment plan it offered to creditors, two people with knowledge of the matter said.

The group, with interests spanning construction, engineering and shipping, plans to raise 5.2 billion dirhams ($1.4 billion) by selling assets including real estate and shares by March 2018, compared with the 2.75 billion dirhams proposed earlier, said the people, asking not to be identified because the information is private. Al Jaber will now need to get an additional 3.9 billion dirhams after already raising 1.3 billion dirhams from previous sales, it said in its presentation to creditors last week, according to the people.

Al Jaber is among several businesses in the United Arab Emirates that sought to restructure liabilities after the global financial crisis in 2008 led to a crash in property prices. The company signed a debt-restructuring agreement with banks in June 2014 after being in negotiations for about four years, people familiar with the matter said at the time.

Abu Dhabi’s economic growth will slow to 1.5 percent this year, from 4.3 percent in 2015, according to the International Monetary Fund, after oil prices sank more than 50 percent in two years.

New Plan

The plan includes raising 1.5 billion dirhams by the end of the year, 600 million dirhams of which will be used to repay debt and for working capital and 650 million dirhams to repay creditors who want to exit at about 50 cents to the dollar, the people said. That figure could rise to as much as 60 cents, one of the people said. The maturity of the remaining debt would be extended to 2024, they said.

National Bank of Abu Dhabi PJSC, Abu Dhabi Commercial Bank PJSC, First Gulf Bank PJSC and Union National Bank PJSC, which hold about 50 percent of Al Jaber’s $1.6 billion debt, agreed to the debt plan, said the people. Creditors had declined Al Jaber’s request earlier this year for a 12-month break in interest payments and had asked it to enhance asset sales to meet debt obligations.

Spokesmen for both Al Jaber and NBAD declined to comment, while spokesmen for ADCB, FGB and UNB didn’t immediately respond to calls and e-mails seeking comment outside working hours.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE