Dubai, which almost defaulted on debt in 2009, is putting the final traces of the global credit crisis behind it.
The United Arab Emirates' Minister of Economy Sultan Bin Saeed Al Mansoori said a $2.7bn deal to restructure the debt and finances of Shariah-compliant mortgage provider Amlak Finance had been completed, the last of Dubai's major debt negotiations. The agreement was facilitated by the recovery in Dubai's economy, which is poised to grow at the fastest pace since 2007 this year amid thriving trade and tourism.
"It ends an unlucky chapter," Richard Segal, head of international credit strategy at Jefferies. "Most of the reschedulings and debt workouts were viewed to be extremely complicated to begin with, but got much easier as time went by."
Amlak, partly owned by Emaar Properties , brings to at least seven the entities that have been reorganized since holding company Dubai World roiled markets in 2009 when it sought a debt standstill on more than $25bn. The government and Dubai Group, another state-owned holding company, rescheduled their liabilities earlier this year, while Dubai World, Nakheel, Limitless, Dubai International Capital and Zabeel Investments also sought to revise arrangements with their creditors.
Amlak's debt restructuring ended amid a resurgent property market. Mid-range apartment prices in Dubai have risen 81pc through October since plummeting to a low in April 2011. Amlak plans to resume trading in Dubai early 2015, Chief Executive Officer Arif Alharmi said yesterday. Its shares were suspended in November 2008 after the global credit crisis blocked the company's access to borrowing.
"Real estate companies are in better shape," said Deepti, a Bangalore-based credit analyst specializing in property at SJS Markets. "Given Dubai's property sector is doing well, given improved sentiment and the fact it's owned by Emaar, they've been able to finalize the restructuring."
Emaar, developer of the Burj Khalifa tower in Dubai, the world's tallest skyscraper, owns 45pc of Amlak.
Dubai got a $20bn bailout from oil-rich Abu Dhabi, the biggest of the seven emirates in the UAE, to support state-controlled companies through the global credit crisis.
Sunday Indo Business