Dubai Group, an investment arm of one of the emirate’s troubled conglomerates, has missed an interest payment on a $330m loan, potentially triggering a cross-default on other debts.
Dubai Group is part of the Dubai Holding conglomerate that is owned personally by Sheikh Mohammed bin Rashid al-Maktoum, Dubai’s ruler. It has gross debts of about $12bn, and several parts of the conglomerate are negotiating with creditors over revised payment plans. But the missed interest payment came as a surprise to bankers.
One senior banker familiar with the situation said he expected Dubai Group would settle the interest payment within the grace period of five working days – which in effect is about 10 days given next week’s Eid al Adha holiday in the Gulf – but said that the missed payment was “clearly a concern”.
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