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HomeEconomyDubai govt entity to repay $319m 18 months before due

Dubai govt entity to repay $319m 18 months before due

dubai world cupDubai Holding Commercial Operations Group (DHCOG), part of a conglomerate owned by the emirate’s ruler, will repay $319 million of debt more than 18 months early, the latest state-linked company to settle restructured loans ahead of time.

Sovereign-linked entities in Dubai were forced to renegotiate billions of dollars of liabilities at the turn of the decade after a local property crash and a lack of refinancing options in the wake of the global financial crisis.

 Maturity dates for much of the restructured debt were extended to allow time for economic conditions to improve and for companies’ assets to increase in value before their sale.

The Dubai economy has made significant progress in recent months, with property prices gaining more than 20 percent and the stock market continuing to strengthen after doubling in value last year, allowing companies to return cash to lenders early.

DHCOG, which last month reported that 2013 profit nearly tripled from a year earlier, said on Wednesday that it will use available funds to repay on May 13 the outstanding sum on a $555 million loan due to mature in December 2015.

The move follows property developer Nakheel’s February repayment of 2.35 billion dirhams ($639.8 million) of bank debt 18 months ahead of schedule.

Last month one of Dubai’s top economic policymakers, Mohammed al-Shaibani, told Reuters that Dubai World, whose request in November 2009 for a $25 billion debt renegotiation shook global markets, intended to make early repayments on some of its rescheduled obligations.

DHCOG, part of Dubai Holding, runs multiple businesses including hotel group Jumeirah, business park TECOM Investments and Dubai Properties Group.-Reuters