Thursday, Apr 05, 2012

--Creditors extend debt for five years

--Dubai World restructuring officer named a director

--DIC under no pressure to sell assets - CEO

(Recasts, adds detail and background throughout.)

By Nicolas Parasie and Asa Fitch

Of ZAWYA DOW JONES

DUBAI (Zawya Dow Jones)--Dubai Holding, the investment vehicle linked to the emirate's ruler, said Thursday its private equity arm Dubai International Capital has reached an agreement with lenders on a $2.5 billion debt deal, while it's confident that the Dubai Group restructuring will be concluded successfully.

Under the terms of the DIC restructuring, lenders will extend $2.15 billion of the debt for five years and receive a 2% cash interest coupon, according to a Dubai Holding statement. The lenders also agreed to extend a second $350 million facility for three years at the unchanged contractual rate of interest.

DIC had said it reached an agreement with its lenders in November. The private equity firm has been negotiating with creditors to reorganize its debt after the global recession took a heavy toll on its business.

But some of the debt deal terms had to be renegotiated, prolonging the conclusion of an agreement, sources told Zawya Dow Jones in February.

DIC in the past year has sold down a significant slice of a private equity portfolio built up during the boom years preceding the global financial crisis. It sold a 45% stake in KEF Holdings, a valve manufacturer based in the United Arab Emirates, and offloaded Ishraq Dubai, a local hotel company.

"Despite the challenging macroeconomic environment the portfolio is well-positioned to navigate current markets with less leverage, better liquidity and long-term financing, reflecting significant future value potential," said DIC Chief Executive David Smoot, adding the company was under no pressure to sell assets.

DIC still has investments in U.K. discount hotel company Travelodge and German alumina company Almatis, among a range of other foreign and domestic stakes.

Dubai Holding also named Fadel Al Ali, executive chairman of Dubai Holding Commercial Operations Group, as DIC's chairman. David Smoot will become chief executive, while Aidan Birkett, Christopher Rowlands and Abdullah Sharafi have been named independent directors. Birkett was the chief restructuring officer overseeing Dubai World's $25 billion debt restructuring.

Dubai Holding's chief executive said Thursday he is confident that the restructuring of another Dubai Holding subsidiary will be resolved.

"Dubai Holding will continue to focus on reaching a consensual agreement with Dubai Group lenders and remains confident that the Dubai Group restructuring will also reach a successful agreement," said Ahmed Bin Byat.

-By Nicolas Parasie and Asa Fitch, Dow Jones Newswires; +9714 446-1681; nicolas.parasie@dowjones.com

Copyright (c) 2012 Dow Jones & Co.

(END) Dow Jones Newswires

05-04-12 0555GMT