Dubai Holdings delays $555m loan repayment

DUBAI Holding’s main unit will delay repayment on a $555m (£361.4m) loan until 30 November, the company said yesterday, the second time it has failed to meet a repayment deadline.

DHCOG, a unit of the conglomerate owned by the Gulf Arab emirate’s ruler, took a big hit on its exposure to Dubai’s property crash.

The company said in June it may resort to asset sales to deal with its debt after posting a $6.2bn loss for 2009. Its assets include Jumeirah hotel group and business parks.

DHCOG was due to repay the $555m loan yesterday, having already extended it for two months in July. Market participants had expected the move.

“The restructuring and rescheduling of debt is still in progress,” Haissam Arabi, chief executive and fund manager at Gulfmena Alternative Investments said.

Concerns about the overall debt burden of Dubai’s state-linked companies mounted after Dubai announced a standstill on repaying $26bn in debt as it restructured conglomerate Dubai World. It unveiled a $9.5bn rescue plan for the firm in March.

The $555m revolving credit is the drawn part of a $1bn loan that was agreed in 2007.