The negotiations at The Investment Dar are part of a series of restructurings happening across the region after the global financial crisis sent asset prices tumbling. Dubai World, the property and ports conglomerate, reached a broad agreement last week to pay its creditors and reduce its US$23.5 billion (Dh86.31bn) of debt. The company will seek a final deal with creditors by the end of next month.
Last month, Gulfinvest International defaulted on a Dh200 million loan from Abu Dhabi Commercial Bank that was guaranteed by Shuaa Capital. The default followed major restructurings at The Investment Dar and Global Investment House, two highly leveraged Kuwaiti investment companies. Gulfinvest is negotiating with creditors over a restructuring. Gulf Finance House, a Bahraini Islamic investment bank, repaid two thirds of a $300m Islamic bank loan and refinanced the rest as part of a debt workout in February. It agreed to pay the remaining $100m by August.
These companies have delayed payments on billions of dollars of debt while increasingly risk-averse banks have refrained from issuing new loans, leaving companies with little prospect of borrowing more to pay off maturing debts. bhope@thenational.ae
