DIFC Investments has likely sold Smartstream — JP Morgan

Dubai DIFC Investments, the investment arm of the company running Dubai's financial free zone, has likely sold software company SmartStream Technologies, resulting in a $68.8 million (Dh252.6 million) impairment provision, JP Morgan said in a research note.

DIFCI, which has been grappling with a debt pile including a $1.25 billion Islamic bond due in June, began seeking buyers for Smartstream in 2010 to raise much-needed cash. In a footnote in its 2011 financial statements last week, DIFCI said it sold one of its discontinued businesses held-for-sale after the financial year ended to a "related party".

"This sale could only be of SmartStream given the magnitude of impairment," JP Morgan analyst Zafar Nazim said, adding other businesses held-for-sale by DIFCI had minimal associated goodwill balances. The "related party" could be the Dubai government or Investment Corporation of Dubai, the analyst said.

DIFCI Chairman Abdullah Mohammad Saleh was not immediately available for comment Sunday.

SmartStream helps investment banks and fund managers with the back and middle-office processing of stock, bond and derivative trades.