A unit of the main conglomerate controlled by Dubai’s ruler is facing off against creditors including Mashreqbank PSC after telling them it won’t fully repay a loan that was restructured in 2013, according to people familiar with the matter.
The $1.2 billion syndicated facility is linked to Dubai Holding Investments Group LLC’s acquisition in 2007 of a 10% stake in U.S. hedge fund Och-Ziff Capital Management Group, since renamed Sculptor Capital Management, the people said, asking not be named because of the sensitivity of the matter.
DHIG extended the maturity by seven years in 2013 as part of a restructuring after it was unable to service the loan in the immediate aftermath of the global financial crisis and its fallout in Dubai. The company is part of Dubai Holding, the conglomerate owned by the emirate’s ruler, which controls assets from leisure developer Meraas to luxury hotel chain Jumeirah Group.
Mashreq, the emirate’s third-biggest bank, has asked Dubai Holding to bail out its subsidiary by repaying the loan in full, the people said. It wasn’t clear which lenders were also holding out.
Dubai Holding, Sculptor and Mashreq declined to comment.
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