UAE News: Dubai Takes Port Operator Private to Tackle Debt - Bloomberg:
Dubai plans to delist its port operator to help repay more than $5 billion of government-related debt.
As part of DP World Ltd.’s delisting, its parent -- Port and Free Zone World -- will pay Dubai World $5.15 billion to help it repay outstanding commitments to banks. The conglomerate has about $9.9 billion in debt maturing in 2022 and a further $1.1 billion due in 2026, according to data compiled by Bloomberg.
The plans come as Dubai faces the prospect of restructuring a chunk of $23 billion in loans to government-related companies maturing at the end of 2021 for a second time, according to Fitch Ratings Ltd. The emirate has enlisted the help of two of its most trusted officials to steer key companies through a drawn-out slowdown, after they pulled the business hub back from the brink of default more than a decade ago.
Dubai is set to endure another year of lower property prices, weak demand and a retail sector that’s struggling. The ongoing slump is a stark reminder of the 2009 global financial crisis when Dubai World restructured $23.5 billion of debt and property developer Nakheel PJSC had $10.5 billion of unpaid bills. Many of the city’s hopes rest on hosting the World Expo 2020 exhibition later this year, which is expected to spur economic growth to about 3.2%, after expanding just 2.1% in 2019.
Dubai plans to delist its port operator to help repay more than $5 billion of government-related debt.
As part of DP World Ltd.’s delisting, its parent -- Port and Free Zone World -- will pay Dubai World $5.15 billion to help it repay outstanding commitments to banks. The conglomerate has about $9.9 billion in debt maturing in 2022 and a further $1.1 billion due in 2026, according to data compiled by Bloomberg.
The plans come as Dubai faces the prospect of restructuring a chunk of $23 billion in loans to government-related companies maturing at the end of 2021 for a second time, according to Fitch Ratings Ltd. The emirate has enlisted the help of two of its most trusted officials to steer key companies through a drawn-out slowdown, after they pulled the business hub back from the brink of default more than a decade ago.
Dubai is set to endure another year of lower property prices, weak demand and a retail sector that’s struggling. The ongoing slump is a stark reminder of the 2009 global financial crisis when Dubai World restructured $23.5 billion of debt and property developer Nakheel PJSC had $10.5 billion of unpaid bills. Many of the city’s hopes rest on hosting the World Expo 2020 exhibition later this year, which is expected to spur economic growth to about 3.2%, after expanding just 2.1% in 2019.
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