Dubai says all is well, to get $4-bn loan off its back

Dubai: The Investment Corporation of Dubai (ICD) has announced it would repay in full $4 billion (14.7 billion dirhams) debt facility maturing on August 21. ICD is the investment arm of the government of Dubai.

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The 3-year facility, a tranche of the $6-billion conventional and Islamic facilities signed on August 21, 2008, will be “repaid from internal sources derived principally from cash dividends received from ICD’s operating subsidiaries”, a statement issued by Dubai Government Media Office said. “Today’s announcement demonstrates that as a part of the government of Dubai, ICD is committed and able to meet its debt obligations,” ICD Executive Director and CEO Mohammad Al Shaibani said.

The 3-year tranche comprises $2.5 billion of conventional financing and $1.5 billion of Islamic financing. The remaining 5-year tranche of $2 billion matures on August 21, 2013. He added, “This substantial repayment is the result of our strong portfolio of diverse and successful companies across Dubai, as well as the underlying strength of our economy.”

The move to repay the loans at a time when global markets are under pressure is expected to send out a positive signal that Dubai’s recovery has strong fundamentals. The lenders of this syndicated facility are a mix of local and international banks.

“Dubai is witnessing a recovery and remains a stable financial centre. The emirate continues to be an attractive destination for business, tourism and trade and has proved its resilience in recent times,” Al Shaibani said.

PTI