The Dubai government has withdrawn a $150 million line of credit set up for Dubai International Capital, a move that is complicating the finalization of the state-linked private equity firm's debt restructuring deal, according to three people familiar with the matter.
The withdrawal is the latest example of an apparent pullback by the government from financial support for state-linked companies restructuring debt. In recent months, the government has rejected requests by banks for government guarantees in debt restructurings at Dubai Group and Drydocks World, according to bankers involved in those talks.
DIC agreed with creditors on the terms of a $2.4 billion debt restructuring late last year, but the pullback on the liquidity facility at the eleventh hour has forced DIC and its banks to again sit around the negotiating table to discuss the final terms, according to one source directly involved in the talks. DIC is a subsidiary of Dubai Holding, the personal investment vehicle of Sheikh Mohammed bin Rashid Al Maktoum, the Ruler of Dubai.
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