DUBAI (Reuters) – Dubai Holding, the investment conglomerate owned by the emirate’s ruler, is considering restructuring up to $20 billion in debt, the FT reported on Monday, in what would be another blow to the indebted emirate.
Dubai Holding, which spans financial investments, hospitality and real estate, may appoint a financial adviser to explore the rescheduling of loans over the next few months, the paper said, without citing sources.
A spokesman for Dubai Holding was not available for comment.
Dubai’s government earlier in March pledged to inject $9.5 billion and recapitalize debt-laden Dubai World and fully repay the bondholders of its property unit Nakheel.
Rating agencies in recent months downgraded a unit of Dubai Holding, citing the lack of information about the state’s ability to support the business.
The downgraded unit, DHCOG, is estimated to owe two thirds of Dubai Holding’s entire debt. At the end of 2008 DHCOG had total assets of nearly $50 billion.
Dubai Holding is one of the emirate’s three conglomerates along with Investment Corporation of Dubai and Dubai World. Dubai Holding is in the sights of jittery investors who are concerned about Dubai’s wider debt pile.
“There might not be much cash left from currently available funds for unfinished real estate projects by other developers such as Dubai Properties, funding fiscal deficit for this year and the next, and potential restructuring for Dubai Holding which is the next box to tick after DW,” Credit Suisse said in a research note dated March 25.
Dubai Holding consists of DHCOG, Dubai International Capital (DIC) and Dubai Group, which owns assets in the UK’s Travelodge and Madame Tussauds.
Talks between creditors and advisers had picked up in the weeks before Dubai World’s announcement and restructuring efforts are likely to focus on DIC and Dubai Group, the FT said.
DIC has about $1.9 billion of debt maturing in the first half of 2010.
Dubai Holding in January sold a 7-percent stake in Egyptian investment bank EFG Hermes.
Billionaire financier George Soros is bidding to buy a stake in the Bombay Stock Exchange held by a unit of Dubai Holding, India’s Business Standard also reported on Monday.