Dubai Group restructuring still on

Dubai Group remains committed to reaching a debt restructuring deal, a spokesperson for the firm says.

Mohammed Al Shaibani, the chief executive of Investment Corporation of Dubai, said last month the emirate would make its debt repayments this year. Jeff Topping / The National

Dubai Group says it remains committed to reaching a restructuring deal on US$10 billion (Dh36.72bn) of debts owed to lenders.

The statement follows a report last week by Reuters that Dubai's Supreme Fiscal Committee (SFC), a senior part of the emirate's Government, had walked away from the debt talks, citing two people it did not identify.

The firm has been in discussions for more than a year with creditors to delay its debt repayments.

A Dubai Group spokesman yesterday said the company was not prepared to comment on its private negotiations. "However, Dubai Group is still in discussions with lenders and is fully committed to reaching a consensual agreement that is reasonable for all stakeholders," the spokesman said.

Dubai Group is one of three arms of Dubai Holding, a conglomerate owned by Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai. The firm appointed a creditors' committee in November 2010 to start talks about altering terms on borrowings after the global recession took a toll on its assets.

The firm has debts of $10bn, of which $6bn is owed to banks.

The SFC had been working with Dubai Group to help it resolve its debts. But Dubai Group told the banks' committee of unsecured lenders in a letter last week that the SFC had ended its involvement in negotiations and that no financial support would be available from the Government, Reuters reported, citing two people who had seen the letter.

Senior Dubai officials have recently voiced confidence that the emirate's state-linked firms would be able to meet their debt obligations. Mohammed Al Shaibani, the chief executive of Investment Corporation of Dubai, said last month the emirate would make its debt repayments this year.

Dubai Group stopped interest payments to creditors in August 2010 to buy time to dispose of assets.

But the impact of the unfolding euro-zone crisis had been hampering the investment company's efforts to sell assets. Banks had granted breathing room to the firm to extend credit facilities until the crisis eased and asset values recovered, a source close to the restructuring talks had said in November.

Through the various arms of its business, Dubai Group owns stakes in a number of financial services companies, including Borse Dubai and EFG-Hermes, as well as shopping centres, hotels and offices in the US, Europe and Asia.

The extent of debts at Dubai Group was revealed in April when the company publicly disclosed that its liabilities had risen from $6bn to $10bn.