UPDATE 2-Dubai’s lossmaking DHCOG extends $555 mln loan

* Won’t be repaying credit facility due July 8

* DHCOG says lenders agree two-month extension

* Unit reported $6.2 billion loss in 2009

(Recasts with background, quotes)

DUBAI, July 8 (BestGrowthStock) – Dubai Holding’s [DUBAHC.UL] main
unit will not be repaying a loan that was due on Thursday,
saying lenders have agreed to extend the $555 million credit, in
the latest blow to investors in Dubai’s troubled debt programme.
Lossmaking Dubai Holding Commercial Operations Group
(DHCOG), part of the Dubai ruler’s personal business empire,
said in a brief statement on Thursday that the extension was on
commercial terms.
“It just adds to the uncertainty of the debt restructuring
of Dubai Holding and it doesn’t comfort investors at the time
when a deal is being finalized,” said Marwan Shurrab, chief
trader at Gulfmena Alternative Investments.

DHCOG reported a $6.2 billion 2009 loss last month. The
business and its parent are part of a matrix of firms known
informally as Dubai Inc., which was badly battered by the
financial crisis and remains in negotiations with creditors.

DHCOG, whose assets include the Jumeirah hotel group and
business parks and hospitality units, said in June it may sell
assets in the wake of its huge loss. [ID:nLDE65003U]

Credit rating agency Moody’s on June 30 downgraded DHCOG to
B2 in its highly speculative category of ratings, taking account
of weakness in Dubai’s real estate market and uncertainty over
the company’s debt restructuring.

“My first thought is that a $555 million, two-month facility
for an entity that lost around that much each month last year is
only a lifeline whilst the company gets its act together,”
Daniel Brody, chief investment at SilkInvest in London.

“A reminder that we are not out of the woods yet,” he added.

POLL on UAE real estate outlook on [ID:nLDE65D1DY]

FACTBOX on UAE real estate outlook on [ID:nLDE63B1MS]

Dubai announced a shock standstill last year on repaying $26
billion in debt as it restructured flagship conglomerate Dubai
World [DBWLD.UL]. It has since unveiled a $9.5 billion rescue
plan for the unit.

Analysts say the focus of investor concerns has now shifted
to Dubai Holding, which spans financial investments, hospitality
and real estate, and is estimated to have about $15 billion in

Another Dubai Holding business — private equity arm Dubai
International Capital (DIC) — asked lenders in May for a
three-month delay in repaying debt. [ID:nLDE64Q1PJ]
DIC had a $1.25 billion loan maturing in June, according to
Reuters data, and $2.6 billion in debt overall, according to a
source familiar with the matter.

In a June interview with CNN, Dubai’s ruler Sheikh Mohammed
bin Rashid al-Maktoum said he was not worried about debt
restructuring in the emirate. [ID:nLDE65N1H1]

The global financial crisis has led to a region-wide real
estate slump which hit cities like Dubai hard.

The Gulf Arab emirate, famous for extravagant real estate
projects like man-made islands in the shape of palms and a world
map, borrowed heavily to fund its transformation into a regional
trade and tourism hub.

It is estimated to have about $101 billion in total debt,
according to a Reuters poll. [ID:nLDE60P01Y]

(Reporting by Tamara Walid, Nicolas Parasie and Rachna

(Writing by Amran Abocar; Editing by Andrew Callus and
Elaine Hardcastle)

UPDATE 2-Dubai’s lossmaking DHCOG extends $555 mln loan