Lenders extend $2.5bn debt: DIC

Dubai Holding said Thursday on its private equity arm Dubai International Capital has reached an agreement with lenders on a $2.5 billion debt deal, while it's confident that the Dubai Group restructuring will be concluded successfully.

Under the terms of the DIC restructuring, lenders will extend $2.15 billion of the debt for five years and receive a 2 per cent cash interest coupon, according to a Dubai Holding statement. The lenders also agreed to extend a second $350 million facility for three years at the unchanged contractual rate of interest.

DIC owns stakes in the German alumina company Almatis, the UK discount hotel chain Travelodge, the industrial packaging firm Mauser and the UK manufacturer Doncasters Group, among other investments.

The company originally reached an agreement with its lenders in November. It had been negotiating with creditors to reorganise its debt after the global recession took a heavy toll on its business. But some of the debt deal terms had to be renegotiated, prolonging the conclusion of an agreement, sources told Zawya Dow Jones in February.

While its portfolio remains large, DIC has recently sold down a significant slice of its holdings to raise cash as debt talks continued. Last year, it sold a 45% stake in KEF Holdings, a valve manufacturer based in the UAE, and offloaded Ishraq Dubai, a local hotel company. It also sold a stake in Oger Telecom last August.

"Despite the challenging macroeconomic environment the portfolio is well-positioned to navigate current markets with less leverage, better liquidity and long-term financing, reflecting significant future value potential," said DIC Chief Executive David Smoot, adding the company was under no pressure to sell assets.

Dubai Holding also named Fadel Al Ali, executive chairman of Dubai Holding Commercial Operations Group, as DIC's chairman. David Smoot, the DIC chief executive, has been nominated for a seat on the board alongside three independent directors: Aidan Birkett, Christopher Rowlands and Abdullah Sharaf. Birkett was the chief restructuring officer overseeing Dubai World's $25 billion debt restructuring.

Dubai Holding's chief executive said on Thursday he is confident that the restructuring of another Dubai Holding subsidiary will be resolved. Dubai Group is currently in restructuring talks of its own over $10 billion of debt.

"Dubai Holding will continue to focus on reaching a consensual agreement with Dubai Group lenders and remains confident that the Dubai Group restructuring will also reach a successful agreement," said Ahmed Bin Byat.

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