World Business

Dubai Holding unit posts $6.2b loss in new hit

(Agencies)
Updated: 2010-06-01 18:04

For sale

DHCOG said that a debt restructuring was not needed as debt rollover talks continued but that it was considering the "sale of certain assets" to manage its cash flow.

The group said it held a 19.5 percent stake in mobile firm Du, a 37 percent stake Greek telecoms firm Forthnet plus stakes in unlisted firms.

Stakes held at the end of 2009 included a 40 percent stake in the UAE's unlisted mobile phone retailer Axiom, a 35 percent stake Tunisia's Societe Nationale de Telecommunications, and the UK's Interoute Telecom Holding Ltd, according to a company statement.

Some of Dubai's most well recognized brands in the hospitality and real estate sectors fall under the ownership of DHCOG, including the flagship Jumeirah Group, which manages the sail-shaped Burj al Arab hotel.

Such "crown jewels" are unlikely to be disposed of as part of any asset sales in view of their strategic as well as financial importance for the company.

The company will most likely be keen to sell off loss-making assets in its property portfolio, but with low valuations, a fire sale disposal is likely to be an option of last resort.

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The group's real estate units have been hardest hit by the financial slowdown which burst Dubai's over-inflated property bubble, leaving desert construction sites vacant and cranes idle.

DHCOG's property units were consolidated under the broader Dubai Properties, which is composed of Tatweer, Sama Dubai and Dubai properties.

The company said it restructured its real estate businesses in 2009 and that there was no need to restructure outstanding debt as talks continued with banks to roll over existing facilities.

DHCOG said in addition that it faced a damage claim of 2.1 billion dirham from a customer that was pending arbitration.