Dubai World re­pays cred­i­tors $8.2B 27 months ahead of time

STATE CON­GLOM­ER­ATE MAKES FI­NAL PAY­MENT TO CRED­I­TORS 27 MONTHS BE­FORE DEBT MA­TU­RITY

Khaleej Times - - FRONT PAGE - Is­sac John is­sacjohn@khalee­j­times.com

dubai — Dubai World has an­nounced that it had made a fi­nal pay­ment of $8.2 bil­lion to cred­i­tors ahead of its Septem­ber 2022 ma­tu­rity.

In a state­ment on Tues­day, the state con­glom­er­ate said it made the pay­ment us­ing funds from a new $3 bil­lion loan from Dubai Is­lamic Bank, as­set sales and div­i­dend pay­ments.

“Once more...our ac­tion un­der­scores Dubai’s com­mit­ment to al­ways meet its obli­ga­tions. Look­ing ahead... Dubai World will fo­cus on stream­lin­ing and strength­en­ing its ef­forts to de­liver longterm value for all stake­hold­ers,” said Sheikh Ahmed bin Saeed Al Mak­toum, Chair­man of Dubai World.

The full re­pay­ment is an im­por­tant mile­stone… Once more, our ac­tion un­der­scores Dubai’s com­mit­ment to al­ways meet its obli­ga­tions Sheikh Ahmed bin Saeed al-Mak­toum, Chair­man of Dubai World

dubai — Dubai World said on Tues­day it made the fi­nal re­pay­ment of $8.2 bil­lion to cred­i­tors more than two years ahead of the due date us­ing funds from as­set sales, div­i­dend pay­ments and the delist­ing of port op­er­a­tor DP World, tak­ing its to­tal re­pay­ments to $18.9 bil­lion since 2011.

The pay­ment, made ahead of its Septem­ber 2022 ma­tu­rity, was an “im­por­tant mile­stone” for the com­pany

and Dubai, the state-owned con­glom­er­ate’s Chair­man Sheikh Ahmed bin Saeed Al Mak­toum said in a state­ment.

“Once more ... our ac­tion un­der­scores

Dubai’s com­mit­ment to al­ways meet its obli­ga­tions,” said Sheikh Ahmed.

The com­pany made the pay­ment us­ing funds from a new $3 bil­lion loan from Dubai Is­lamic Bank, as­set sales and div­i­dend pay­ments, it said.

“Look­ing ahead, Dubai World will fo­cus on stream­lin­ing and strength­en­ing its ef­forts to de­liver long-term value for all stake­hold­ers,” Sheikh Ahmed said.

Dubai World, the gov­ern­men­towned con­glom­er­ate with in­ter­ests in ports, real es­tate and hos­pi­tal­ity, signed a $25 bil­lion debt restruc­tur­ing agree­ment in 2011 af­ter Dubai was hit by the global fi­nan­cial cri­sis.

“We’re re­ally try­ing to get the job done,” Mo­hammed Al Shaibani, the Di­rec­tor Gen­eral of H.H. The Dubai Ruler’s Court, and a Dubai World board mem­ber told Bloomberg in an in­ter­view. “As soon as we’re able to pay, we just do a pay­ment. This is not the first time we pay ahead of time by the way,” said Sheikh Ahmed.

Dubai World, the gov­ern­ment-owned con­glom­er­ate with in­ter­ests in ports, real es­tate and hos­pi­tal­ity, signed a $25 bil­lion debt restruc­tur­ing agree­ment in 2011 af­ter Dubai was hit by the global fi­nan­cial cri­sis.

“This is a very pos­i­tive news com­ing out of Dubai and shows the com­mit­ment of the govt to meet its var­i­ous debt obli­ga­tions. It au­gurs well for the debt pro­grammes com­ing out of dubai in the fu­ture. It will also cer­tainly help in im­prov­ing busi­ness con­fi­dence of in­vest­ing and do­ing busi­ness lin Dubai,” Shailesh Dash, chair­man, Gulf Pin­na­cle Lo­gis­tics, said.

Dubai World used funds from its sub­sidiaries to re­pay the debt, in­clud­ing $6 bil­lion from Port and Free Zone World, $2.7 bil­lion from the sale of Eco­nomic Zones World and a $1.6 bil­lion div­i­dend from In­fin­ity World. It also raised a $3 bil­lion loan from Dubai Is­lamic Bank.

The pay­ment comes as Dubai faces the prospect of restruc­tur­ing a “sig­nif­i­cant por­tion” of $23 bil­lion in loans made to Dubai gov­ern­ment-re­lated com­pa­nies ma­tur­ing at the end of 2021, ac­cord­ing to Fitch Rat­ings Ltd.

“Honor­ing com­mit­ment on time will in­crease the trust and de­fines the fu­ture of Dubai,” Saad Ma­niar, se­nior part­ner at Crowe UAE, told Khaleej Times on Tues­day.

In Fe­bru­ary, Dubai World took full con­trol of its port op­er­a­tor DP World in a deal with a $13.9 bil­lion val­u­a­tion that would help the com­pany at the cen­ter of the emi­rate’s 2009 debt cri­sis to re­pay some of its bor­row­ings.

DP World, which op­er­ates ports around the world, took on $8.1 bil­lion in debt to fi­nance the deal in which Port and Free Zone World, part of Dubai World, ac­quired the 19.55 per cent of Nas­daq Dubai listed shares for $2.7 bil­lion. Port and Free Zone World al­ready owns 80.55 per cent of DP World or­di­nary share cap­i­tal.

As per the ar­range­ment, the sub­sidiary pays Dubai World $5.15 bil­lion, help­ing it to meet out­stand­ing obli­ga­tions to lenders so that DP World can im­ple­ment its strat­egy with­out re­stric­tions. Dubai World sub­sidiaries face cer­tain re­stric­tions due to agree­ments with cred­i­tors but DP World had been ex­empt from those re­stric­tions as long as it was listed.

This is a very pos­i­tive news com­ing out of Dubai and shows the com­mit­ment of the govt to meet its var­i­ous debt obli­ga­tions Shailesh Dash Chair­man, Gulf Pin­na­cle Lo­gis­tics

KT GRAPHIC • SOURCES: Dubai World, Reuters and KT Re­search

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