Dubai: Dubai World’s biggest creditors have agreed a deal with the state-owned conglomerate to renegotiate its debt repayment schedule, one of Dubai’s top government officials said on Wednesday.
However, Shaikh Ahmad Bin Saeed Al Maktoum, President of Dubai Civil Aviation and Chairman and CEO of Emirates airline and Group in his capacity as chairman of Dubai’s Supreme Fiscal Committee, also denied that some of the emirate’s most high-profile state-owned companies, such as Emirates airline, could join a rush of initial public offerings being planned in the coming months.
Strong demand for a $1.58 billion (Dh5.8 billion) IPO of Emaar Properties’ malls unit last month shows confidence running through Dubai’s economy thanks to increased revenue from travel and tourism and a recovery from a property crash and debt crisis at state-linked companies.
Some firms want to use the positive sentiment to improve their debt positions, with Dubai World seeking to extend the repayment date of the biggest chunk of debt under its $25 billion restructuring in exchange for a series of incentives.
Sources told Reuters last month that an agreement had been secured with the creditor committee of banks including HSBC and Emirates NBD on a deal.
“I would say so,” Shaikh Ahmad told reporters at an Africa-focused investment event in the emirate when asked if the biggest creditors had agreed the plan.
Connection
A number of companies are expected to follow Emaar’s malls unit and list on the Dubai bourse. Shaikh Ahmad is one of the top economic decision-makers in the emirate and is chairman of a number of Dubai state firms, including carrier Emirates. He ruled out on Wednesday any flotations by these companies, including the airline and air travel service provider Dnata, saying they were not being considered.
But he said the airline is looking to expand the number of routes it services in Africa and it would add more frequencies where bilateral agreements allowed.
“For us, Dubai is always about connection...and no doubt that we will expand to every point in Africa.” Dubai announced last month it will spend $32 billion on expanding its second airport — Al Maktoum International — to handle over 200 million people annually next decade, roughly triple the current level of passenger traffic.
A financing committee has been put together to study how to fund the project, with the government putting in cash initially to kick-start construction while it conducts financing arrangements over the next 12 months, Shaikh Ahmad said.
