Dubai Group debt deal said to be near

Dubai Group's restructuring is nearing completion and could be done by the end of June believes a banker at Noor Islamic Group.

Noor Islamic Bank is a subsidiary of Dubai Group.

Dubai Group, a financial services holding company owned by Dubai Holding, is nearing a deal with creditors over restructuring US$6.2 billion (Dh22.77bn) of debt, according to one of the bankers involved in the talks.

Hussain al Qemzi, the chief executive of Noor Islamic Bank, which is itself a subsidiary of Dubai Group, is among a number of lenders involved in the restructuring talks. He said he was optimistic an agreement would be reached by the end of June.

"It's close to being signed," he said. "It just took its natural time. There are many banks involved and it's a complex issue to agree on all these things."

He said he expected repayment of the debt to be rescheduled, with the principal to be repaid in full.

"We are just one bank out of many banks there," he said. "However, we're satisfied with the progress and I think it'll reach an amicable solution that will satisfy all parties."

Dubai Group has $1.83bn of debt maturing this year and next, according to a research note from Credit Suisse.

A missed debt payment in November last year sparked restructuring talks with creditors on the $6.2bn of debt.

Dubai Group is part of Dubai Holding, the conglomerate owned by Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai.

Prior to the global financial crisis, Dubai Group invested in financial services assets throughout the world. The company holds a controlling stake in Dubai Bank and Taib Bank, alongside minority holdings in EFG-Hermes and Borse Dubai.

Reaching an agreement may be easier said than done. One person familiar with the matter said one of the sticking points in the talks was that there were two groups of creditors, only some of whose lending was secured or partially secured.

"Unsecured creditors are depending on a high net asset value to get paid out, and I think that's a remote possibility here," said the person, who declined to identified. "The challenge is finding a deal in a consensual manner where the people who stand to lose most feel they can live with it."

Khalid Howladar, a financial analyst at Moody's Investors Service, expressed scepticism that an agreement would be reached by the end of June, noting that finalising Dubai World's debt restructuring took more than a year.