DIC to replace CEO; lenders agree to debt plan
Dubai, December 16, 2010
Dubai Holding's private equity arm DIC will replace its chief executive as major lenders agree to the investment company's plans to restructure $2.6 billion of debt, sources said on Thursday.
Dubai International Capital's (DIC) chief investment officer David Smoot will replace Anand Krishnan as CEO, two sources familiar with the matter told Reuters.
One of the sources said the core committee of lenders agreed to the offer of 2 percent interest and repayment over six years on a $1.25 billion syndicated loan that was due in June, after negotiations over the terms of the debt restructuring.
DIC extended the loan to Sept. 30, then asked for a second extension to Nov. 30.
The company's debt restructuring also covers bilateral loans and a $542.5 million syndicated facility due in 2010.
DIC, a unit of Dubai Holding which is owned by the ruler of Dubai, has around $2.6 billion debt. Its restructuring proposal includes selling assets to raise funds.
'DIC continues to make significant progress in its discussion with lenders regarding the restructuring of its liabilities and looks forward to updating the market shortly,' a spokeswoman for the company wrote in an email.
Dubai's liabilities are estimated at around $115 billion, with some $30 billion in bonds and loans owed by state-linked firms slated to mature in 2011-2012.
Debt problems in Dubai, which accounts for more than 32 percent of the UAE's economy, have slowed the Gulf Arab state's recovery in 2010.
In November, Reuters reported that financial services firm Dubai Group, another unit of Dubai Holding, missed two payments on separate loans.
A spokesman for the group said it set up a committee of banks to discuss its debt obligations. UK bank HSBC and local lender Emirates NBD are co-chairing the committee leading the talks between creditors and DIC. Investment bank Lazard is advising DIC.
HSBC was bookrunner and agent for DIC's $1.25 billion June loan, with Bank Of Tokyo Mitsubishi-UFG, Emirates Bank, Emirates NBD, Lloyds and Sumitomo Mitsui mandatory arrangers for the loan. – Reuters
More Finance & Capital Market Stories
- Gulf stocks surge as Fed tapering adds fuel to fire
- SABB launches graduates programme
- NBAD names key official for Hong Kong
- Commercial Bank of Dubai obtains $450m loan
- EFG Hermes names group co-chief
- Islamic bond issuance in GCC picking up
- Kuwait budget surplus likely to hit $42.4bn
- Bahrain banking sector on road to recovery
- GCC banks' outlook stable, says report
- GBSA panel names new chairperson