Dubai Holding repays bond

Dubai Holding Commercial Operations Group (DHCOG) on Thursday said it had repaid a 250 million Swiss franc ($304.9 million) bond, maturing on July 14.

"Dubai Holding Commercial Operations Group is committed to meeting its financial obligations as they fall due," the company said in a statement to the bourse.

The company, the main unit of Dubai Holding, had said it would repay the Swiss franc bond when it announced its annual results in April, a move positively received by investors.

DHCOG, which reported a return to profit in 2010, and its parent Dubai Holding are part of a matrix of firms known informally as Dubai Inc., which includes conglomerate Dubai World.

DHCOG assets include the Jumeirah hotel group and business parks and hospitality units.

With the repayment of its bond, DHCOG total debt has declined to about $3.6 billion from its peak of $4.45 billion in 2008, JP Morgan said in a note on Thursday.

DHCOG made payments of Dh2 billion to contractors in 2010, the company told JP Morgan.

Management also said it would not enact a global settlement with contractors or issue bonds, as in the case of Dubai developer Nakheel , the research note said.

"(DHCOG)... instead will continue to negotiate with contractors on a one-on-one basis," said the note.

JP Morgan said the company's rental portfolio, which includes several offices in a Dubai mixed-use business park, is expected to be its cash cow.

May sell $2bn telecom assets

Dubai Holding Commercial Operations Group (DHCOG) may sell its entire telecom portfolio over the next three years primarily to repay contractor liabilities, JP Morgan said in a note.

The unit's telecoms portfolio includes stakes in Tunisie Telecom and UAE operator du and is worth an estimated $2 billion, JP Morgan analyst Zafar Nazim wrote in a note on Thursday.

"Based on a number of management comments, we expect the company to sell all these assets over time," Nazim said in the note. "We expect the company to refinance future debt maturities and shift its focus to paying contractors."

The analyst said sales would go toward repaying nearly $2.3 billion of DHCOG's estimated $3 billion in contractor liabilities. The company, which reported a return to profit in 2010 after a massive loss the previous year, has a 35 per cent stake in Tunisie Telecom and a 19.5 per cent stake in du.

A DHCOG spokeswoman was not immediately available for comment.