IslamicFinance.de

Dubai Group's $10 billion debt restructuring will be managed by David Smoot, chief executive officer of Dubai International Capital (DIC). In addition to Smoot's appointment, two banks will be named to a post-restructuring creditor committee to provide oversight of Dubai Group's business to ensure the interests of creditors are protected for the duration of the debt deal. In order to succeed the group is yet to divest some of its larger assets.

Bankers have an optimistic attitude towards a full-scale restructuring of the US$10 billion (Dh36.72bn) debts of Dubai Holding. They consider such a move to be imminent following the settlement of a legal action against a unit of the conglomerate. Four banks, one of which Royal Bank of Scotland, have reached an agreement on the terms of restructuring debts of Dubai Group, the financial arm of the holding company. This will include their dropping a controversial legal action against the Dubai company.

Reuters published a report that stated that Dubai Group has not made any interest payments, worth hundreds of millions of dollars, on $10bn of its outstanding debt since August 2010. The report added that no financial support from Dubai authorities has been offered.
It seems that at this point, Dubai Group’s assets could be worth as little as $2.5-3bn.

Dubai Group is one step away from signing a restructuring deal with lenders.
Hussain Al Qemzi, the chief executive officer of Noor Islamic, one of the creditor banks, stated that an agreement could be signed in the second quarter of 2011.
A bank committee for debt restructuring at Dubai Group was established since last year. Noor Islamic Bank has two Islamic bond mandates, one each in the Gulf region and Turkey. The deal on both issues would be between $250 million to $300 million.

Dubai Group has set up two bank committees to speed up the process of restructuring.
A source close to the restructuring talks told Gulf News that the two committees are working closely with Dubai Group to reschedule the loans.

Bahrain's Unicorn Investment Bank has dropped plans to buy Dubai Group's 40 percent stake in Malaysia's Bank Islam.
Dubai Group said in October 2009 it was reviewing options for the stake in Malaysia's second-largest Islamic bank as it shifts its focus closer to home.

The five-year loan was used to fund Dubai Group's acquisition of a 49 per cent stake in Bank Islam Malaysia.
Dubai Group has stakes in Dubai-based investment bank Shuaa Capital, Greek group Marfin Investment Group and Australia's Citigold Corp.