Dubai eyes Oman unit stake sale: sources

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Dubai Group, an investment vehicle owned by Dubai's ruler, is in informal talks to sell its stake in Oman National Investment Corp Holding (ONIC) ONIC.OM, three sources familiar with the matter said on Wednesday.

DEALS

Dubai has been at the center of a debt storm since its flagship conglomerate, Dubai World DBWLD.UL, rocked global markets on November 25 with a request to creditors for a standstill agreement on $26 billion worth of debt.

Dubai Group, whose parent company Dubai Holding is undergoing a transformation to help it weather the crisis, is seeking to sell its 41-percent stake in the Omani business, the sources said.

In October, Dubai Group said it would reassess its investment strategy and that it was reviewing its options to sell its stake in Malaysia's Bank Islam. In December, it sold a 7 percent-stake in Egyptian investment bank EFG Hermes (HRHO.CA) for $120 million.

"We expected some rethinking on the strategy and on which assets to divest and this is proving to be consistent with that," said Ali Khan, managing director and head of brokerage at Arqaam Capital.

"We will likely continue to hear about other assets being divested that don't fit the group's strategy."

The talks with ONIC are in the preliminary stage and no written mandate has been agreed upon, the sources said.

Executives at Dubai Group and Onic declined to comment.

Dubai Holding bought a 35-percent stake in the Omani firm in 2007 from Shuaa Capital SHUA.DU through its investment arm, Dubai Financial, a unit of Dubai Group.

Based on the share price of 0.544 rials at 0745 GMT, a 41-percent stake in ONIC is worth slightly more than $90 million.

Dubai Holding has about $1.9 billion of debt maturing in the first half of 2010END