Dubai: Dubai Holding's private equity firm, Dubai International Capital (DIC) yesterday said it is asking for a three-month delay in debt repayment from its creditors, it announced in a statement.

The major loan that would be restructured is a $1.25 billion (Dh4.59 billion) payment due at the end of June, of the total $2.6 billion debt held by DIC due in 2011. It in the meantime, the company would continue to pay interest as normal. "It is not a standstill. It is a request for extension of maturity," a company spokesperson told Gulf News. The company said there are two additional loans maturing, but are on a smaller scale, and declined to provide more details.

"Dubai International Capital and a Coordinating Committee of banks today presented a request to lenders for a three-month extension to 30 September 2010 of certain maturities," it said in the statement.

Reuters reported that main creditors of DIC have supported the request to delay debt, but did not mention which banks those might be.

The bookrunner of the debt is HSBC, while the mandated arrangers are Bank of Tokyo-Mitsubishi, Emirates Bank International, Emirates NBD, Lloyds TSB Bank and Sumitomo Mitsui Banking Corporation Other arranger banks include Barclays Bank, Citi, First Group and Gulf International Bank BSC, a source told Gulf News.

Longer term

"The extension period would allow the implementation of a consensual longer term plan that would enable DIC to maximise the value of its business for the benefit of all its stakeholders," it said.

The announcement comes a week after Dubai World reached an agreement with its coordinating committee of creditors on a $23.5 billion restructuring plan.

"We said that news like this could pop up and could be a bumpy ride. But the worst is over. The majority have accepted it and discounted that into the equity markets," said Haissam Arabi, chief executive and fund manager at Gulfmena Alternative Investments.

He said the news does not come as a surprise and would not have a significant impact on market sentiment since it was earlier discussed that after Dubai World, other government related entities could be affected.

  • $1.25b: loan due to be repaid in June
  • $2.6b: in total to be repaid to creditors