DUBAI, Nov 24 (Reuters) - Dubai Properties, a unit of troubled conglomerate Dubai Holding, is expected to enter restructuring, according to the head of builder Arabtec ARTC.DU, which is owed money by the firm.
Asked how he knew a restructuring was likely, Arabtec CEO Tom Barry said he was in discussion with the developer over the payment for four completed projects.
But Arabtec, the builder of the world’s tallest tower in Dubai and Emirates’ largest builder by market value, still expects to get paid. “I believe funds will be available to them because I trust in Dubai,” Barry told reporters on the sidelines of an industry event in Dubai on Wednesday.
Dubai Properties could not be reached for comment. A restructuring of Dubai Holding, Dubai Properties’ parent company, is already under way [ID:nLDE6AF160].
Barry would not disclose the amount owed to Arabtec by Dubai Properties, saying the numbers are yet to be finalised.
Dubai-based Arabtec, which is bidding for $8.17 billion of work outside its local markets, is expanding overseas to diversify its portfolio away from Dubai’s once-booming property sector which has been hit hard by the global financial crisis as developers slowed or cancelled projects and jobs were slashed.
It is focusing on winning projects in new markets and has tendered for work in Turkmenistan, Azerbaijan and Angola.
Concerns about Dubai’s liabilities, estimated at around $115 billion, have eased after state-owned Dubai World reached a deal in September to restructure almost $25 billion of debt.
But worries still persist about the debt pile owed by key firms such as Dubai Holding [DUBAHC.UL]. Dubai and its firms face some $30 billion worth of debt maturing in 2011-2012.
Property prices in Dubai have been under pressure since late last year, when the financial crisis and a slump in oil prices ended a six-year economic boom in the Gulf region. (Reporting by Tamara Walid; Editing by Andrew Callus)