* Company in spotlight after Dubai World debt delay
* Dubai Holding unit has $1.25 bln loan due in June
By Amran Abocar
DUBAI, Jan 24 A Dubai Holding unit, which
belongs to the ruler of the emirate, said on Sunday it had made
about $100 million worth of scheduled distribution payments on
three bonds due over the next five years.
The move by Dubai Holding Commercial Operations Group
(DHCOG), the holding firm of Dubai Holding's property, business
parks and hospitality units, could help allay fears that more
Dubai-linked entities face debt commitments they cannot meet.
"It sends the right signal to the markets," said an analyst
at an international lender, who asked not to be identified.
"I have no doubt they will struggle over the next few
months. But they will get over it with the support of Abu Dhabi.
"I don't think Abu Dhabi will let them down."
Dubai rocked global markets on Nov. 25 when it asked for a
delay in repaying $26 billion in debt linked to its Dubai World
conglomerate and its property units Nakheel and Limitless World.
Arabic-language daily Al Ittihad, citing an internal report
on Sunday, said the conglomerate's property and investment
assets exceed $120 billion at the end of 2009, enabling it to
cover its debt.
Dubai World -- which has yet to publicly outline its
restructuring plans and present a standstill agreement to
creditors -- managed to stave off a $4.1 billion default on an
Islamic bond linked to property unit, Nakheel.
That repayment came thanks to a last-minute bailout by
wealthier neighbour Abu Dhabi on Dec. 14.
With the Nakheel bond out of the way, Dubai Holding was next
in the sights of jittery investors, concerned about the group's
The company is made up of DHCOG, Dubai International Capital
and Dubai Group, which own foreign assets including stakes in
the HSBC (HSBA.L), Madame Tussauds and Travelodge.
Dubai Holding has a $1.14 billion loan maturing August 2011,
but more pressing is Dubai International Capital's $1.25 billion
loan which matures in June 2010.
In a statement to Nasdaq Dubai, DHCOG said it had made the
periodic distributions which come due on Feb. 1, 2010.
The company said the three payments consist of: a 35.63
million euro distribution on a 750 million euro note due Jan.
30, 2014; 30 million pounds on a 500 million pound note due Feb.
1, 2017 and $828,650 on a $500 million note due Feb. 1, 2010.
"They're current on their payments but that in itself
doesn't resolve the longer term issues in regards to Dubai
World's restructuring," said Mohieddine Kronfol, managing
director, at Algebra Capital.
"It doesn't take away from the fact that they're still
restructuring their debts so it's not a material piece of
information for the markets."
Dubai has put on a brave face in the wake of the debt
crisis, with the Gulf Arab emirate formally opening the world's
tallest tower, the Burj Khalifa, in a glitzy ceremony on Jan. 4.
Meanwhile, Nakheel said last month that plans to hand over
to developers The World islands, an archipelago shaped like the
map of the world, continued.
State-run Borse Dubai, a shareholder in the London Stock
Exchange (LSE.L), said on Jan 19 it had decided to exercise a
one-year option to extend a $2.5 billion synydicated loan
On Sunday the chief executive of Dubai Properties said the
company planned to spend up to 4 billion dirhams ($1.09 billion)
annually in the next three years on its future plans.
Speaking to an Arabic-language daily, Khalid al-Malik said
the company would depend on self-financing to execute projects
within its existing plans. [ID:nGEE5B820Y]
For a FACTBOX on Dubai Holding, click on [ID:nGEE5B820Y]
For a TAKE A LOOK on Dubai's debt crisis see [ID:nGEE5AO2FN]
(Reporting by Amran Abocar; Editing by Greg Mahlich)