Dubai International Capital (DIC), part of Dubai Holding, has asked its lenders for a three-month standstill on debt repayments. Together with a coordinating committee of banks, it "presented a request to lenders for a three-month extension to 30 Sept 2010 of certain maturities". DIC is an investment company formed in 2004 whose portfolio includes an 80 per cent stake in Travelodge Group of the UK, a chain of budget hotels, 50 per cent of CB Richard Ellis Middle East, a property advisory business, and about 78 per cent of Germany's Mauser Group, a producer of industrial packaging.
It is a subsidiary of Dubai Holding, a private company owned by Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai. According to a statement from the company, "the extension period would allow the implementation of a consensual longer term plan that would enable DIC to maximise the value of its business for the benefit of all its stakeholders". The move is likely to depress the local stock markets when they re-open on Sunday.
"This looks like another round for Dubai Inc to reschedule all their debt," said Alfred Fayek, managing director of institutional equity sales at EFG-Hermes. "This should have a negative impact on the markets. We need more information."
rwright@thenational.ae