Creditors turn $555m Dubai Holding debt into new loan

Dubai and its government-linked companies have notched another in a series of financial restructurings, with a division of Dubai Holding agreeing with creditors to convert US$555 million (Dh2.03 billion) of debt into a new five-year loan.

Dubai Holding Commercial Operations Group (DHCOG), a unit of Dubai Holding that owns the Burj Al Arab hotel and the free-zones operator TECOM, reached the accord after months of negotiations with banks. The deal was announced in an e-mail late on Thursday. Dubai Holding is owned by Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai.

The $555m revolving loan was originally due last July. With banks reluctant to refinance after the global financial crisis and DHCOG short of cash to repay the debt on schedule, however, the division received a two-month repayment extension as talks began about a restructuring. DHCOG lost about $6.2bn in 2009.

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