Deserted debts stir disquiet in the mysterious world of Dubai Inc | Reuters
Dubai’s debts have always been something of a mystery for investors but since the coronavirus pandemic hit its economy, things have got hazier, some say.
Over the past 12 months, two firms with links to Dubai’s government and its ruler, respectively, have said they would not meet hundreds of millions of dollars’ worth of debt repayments, a rare step in the Middle Eastern business hub, where debts are typically renegotiated and state support is often seen as implicit.
One of the firms, Dubai Holding, the investment vehicle of Sheikh Mohammed bin Rashid al-Maktoum, Dubai’s ruler, told creditors that it would not service a $1.2 billion loan owed by its subsidiary Dubai Holding Investments Group and was prepared to pursue liquidation for the unit, according to a source and a document sent to investors in December and reviewed by Reuters.
The second firm, state-owned property developer Limitless, told creditors last March it wasn’t able to meet payments for a loan worth about $1.2 billion, according to a company document seen by Reuters. It has since been seeking to restructure the debt.
Dubai Holding, which has $35 billion in assets and holdings in property and the hospitality sector, declined to comment on the debts of its subsidiary and repayment plans for other units. A Limitless spokeswoman told Reuters its restructuring discussions with lenders were continuing but did not comment further. Creditors to the company included Dubai banks such as Emirates NBD, Mashreqbank and Dubai Islamic Bank. They declined to comment.
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