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Dubai sets up two groups for $6bn debt talks

Dubai, January 25, 2011

Dubai Group, part of a conglomerate owned by the ruler of Dubai, said it wants to speed up restructuring talks on $6 billion of debt and has set up two creditor committees.

The emirate is climbing out from under a massive debt burden, with other state-linked firms also restructuring. Flagship conglomerate Dubai World reached a $25 billion restructuring deal with creditors in September.

Bankers have previously warned that the restructuring of Dubai Group will be trickier than other government-related entities as its asset portfolio is mainly in financial firms, which have some of the most depressed values of any sector.

It has stakes in Dubai-based investment bank Shuaa Capital, Greek group Marfin Investment Group and Australian company Citigold Corp.

But its assets are mostly minority stakes, making it difficult for it to influence the performance, and eventual value, of the companies.

Dubai World, which set up a bank committee last November to engage in talks with its lenders, said one of the creditor committees is for secured lenders Mashreq Bank and Natixis SA's Nexgen.

The second is for creditors whose loans are partly secured or are unsecured. Royal Bank of Scotland and Emirates NBD are co-chairs of the latter.

'It's just to make the process more efficient and bring it to a quicker conclusion,' the spokeswoman said.

Among Dubai Group's outstanding debt is a $1.5 billion murabaha Islamic financing facility due August 2011.

Last November, sources said Dubai Group had missed two payments on separate loans including the murabaha and a $330 million loan arranged by Citibank.

Dubai Group's parent, Dubai Holding's other units, including Dubai International Capital (DIC) and Dubai Holding Commercial Operations Group (DHCOG), have also moved to restructure debt.-Reuters

Tags: Dubai group | debt talks |

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