Dubai World, the government-owned conglomerate, has appointed the New York investment bank Blackstone to thoroughly review its strategy for disposals and debt repayment.
Dubai World, whose debt problems sparked the 2009 financial crisis in the emirate, feels the need for a "fresh pair of eyes" on its debt situation, according to one person familiar with the situation. A spokesman declined to comment.
A spokesman for Blackstone in New York confirmed that DW had hired the firm on a “debt optimisation mandate” but declined to comment further.
In 2010 the company reached agreement with creditors over the terms of US$25 billion of debt.
Part of the settlement involved Dubai World repaying about $4.4bn next year, with another tranche of about $10bn falling due in 2018.
Mohammed Al Shaibani, the chief executive of the Investment Corporation of Dubai and a leading architect of Dubai’s financial recovery, said this week that Dubai World would meet next year’s deadline, and had already repaid about $284.5 million of its borrowings ahead of schedule.
Blackstone, quoted on the New York Stock Exchange, is one of the leading investment advisory businesses.
One of its specialities is corporate restructurings and reorganisations. Blackstone is also experienced in property investment. Some of Dubai World’s remaining big assets are in US property.
Dubai World creditors met for their annual meeting with the company yesterday in Dubai. Media was not allowed to attend the event and no statement was issued.
However, the company is believed to be happy with the rate of disposals and repayments so far. In the past few months, it has sold two hotel interests, the Fontainebleau in Miami and the Atlantis resort in Dubai. Earlier, it disposed of the international logistics business Gazeley.
No sums were disclosed for these disposals, but it is believed that about $1bn of assets have been sold in total so far.
One Dubai banker said the appointment of Blackstone would involve a “review of debts, rather than a restructuring”. There has been speculation that Dubai World might need to again restructure the 2018 element of its liabilities.
Rothschild advised Dubai World on the negotiations in 2009-10. Since then, Dubai World has used various advisory firms for specific disposals.
fkane@thenational.ae
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