Dubai International Capital LLC, a buyout company owned by the Emirate, is offering banks interest of about 2 percent on new loans as part of a $2.6 billion debt restructuring, two people with knowledge of the talks said.
The company is also asking its 26 creditor banks to extend loan maturities to five to six years to allow asset prices to recover, said the people, who declined to be identified as the discussions are private. Lenders are in turn seeking a guarantee from the government to make up any losses if money raised from the sale of Dubai International’s assets isn’t sufficient to repay the loan principal, the people said. An official at Dubai International Capital declined to comment.
Dubai International parent Dubai Holding LLC’s 4.75 percent bond due 2014 yields 11.9 percent today, according to data compiled by Bloomberg. Dubai International’s assets include stakes in budget hotel chain Travelodge Hotels Ltd., U.K.-based medical imaging company Alliance Medical Ltd. and Mauser AG, a German industrial packaging company.
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