Agreement on 10 billion dollars debt restructuring, signed the Dubai Group, as Reuters reveals, thus ending the financial crisis that erupted in the emirate in 2009. The Dubai Holding, the investment vehicle controlled by the Emir of Dubai, was one of the state controlled companies borrowed huge amounts from banks in order to finance acquisitions wave during the economic boom, the period 2006-08.
However, with the global economic crisis and the bubble in real estate, many of them were unable to meet their obligations and had to renegotiate tens of billions of dollars in debt. The Dubai Group began negotiations to restructure its debt in 2010. This followed the agreement of Dubai World to restructure debt of 25 billions. The lenders, which include among others the French Natixis and Emirates NBD in Dubai, will sign the relevant documents in the coming days.
The final agreement provides for extension of the repayment of loans for 12 years. The schedule is directly dependent on the level of safeguards against a certain debt. This means that the assets of Dubai Group may recover in value before it is sold to cover the liabilities.
By Nicole P.
