Dubai Holding subsidiary gets credit extension

DHCOG credit facility given until 30th Nov as Nakheel sukuk progresses

A majority of Dubai World and Nakheel creditors have agreed to a restructuring.
A majority of Dubai World and Nakheel creditors have agreed to a restructuring.

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A subsidiary of Dubai Holding, owner of Nakheel parent Dubai World, yesterday received its second extension to a US$555 million revolving credit facility.

The company stated to Nasdaq Dubai yesterday that Dubai Holding Commercial Operations Group (DHCOG), was granted the extension until 30th November.

“The extension is required to enable all those involved to seek an agreement on an extended long term facility,” Dubai Holding stated, in reference to DHCOG.

Dubai Holding the state-owned conglomerate looking to restructure around US$23.5 billion of debts, has gained clearance to delay a $1.8 billion repayment due this month, according to newswire Bloomberg.

Dubai Holding owns Dubai World, the investment vehicle also restructuring its debts to satisfy international creditors. In May Dubai World, which owns developer Nakheel, gained an approval from creditors to the equivalent of 60% of its debt value for a choice of repayment options into two main tranches differentiated by bond maturity, interest and shortfall guarantees. Within the second tranche there are three further options relating to repayment schedules.

Aiden Birkett, chief restructuring officer at Dubai World, told The National that if the level of acceptance from creditors reached 80% of value, some of them might demand a tribunal process to thrash out a deal. “It would be good to get [a deal] without recourse to measures like that and I think we’ve got a good chance of doing that,” he said.

Meanwhile, Nakheel plans to list a sukuk estimated by JP Morgan at $3.2 billion on Dubai Nasdaq after seeking to restructure the US$10.5 billion in debts. The developer, which created the palm-shaped island conglomerates off Dubai’s coast, is to pay 40% of its repayment in cash and 60% in bonds, following an agreement with creditors.

Sukuk issues are still second to initial public offerings of equity as the money-raising choice for companies in the region, Steve Drake, head of Capital Markets Group at PricewaterhouseCoopers, told CW in July.

 

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