Dubai Holding, the investment conglomerate owned by the emirate's ruler, said on Thursday its private equity arm has reached an agreement with creditors to restructure $2.5 billion of debt, ending nearly two years of talks. Dubai International Capital, which has stakes in British-based budget hotel chain Travelodge and German alumina products maker Almatis, will extend $2.15 billion of outstanding bank loans by five years at an interest rate of 2 percent.
A further $350 million in loans will be extended for three years, said Dubai Holding, owned by Sheikh Mohammed bin Rashid al-Maktoum. The debt agreement marks another milestone in Dubai's effort to rebuild its credibility with investors who fled the region after state-owned conglomerate Dubai World shook markets in 2009 with plans for a $25 billion debt restructuring. Dubai World had built up the debts during the boom years before the financial crisis. It reached a final deal with creditors in 2010, extending repayment over five to eight years.
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