Dubai sells finance asset to Abu Dhabi
Source: Bloomberg News |
June 24, 2013, Monday
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Print Edition
Print Edition
DUBAI Group LLC has agreed to sell its stake in a finance company to First Gulf Bank PJSC, controlled by Abu Dhabi's ruling family, as it restructures debt.
Dubai Financial Group, a unit of the government-owned company, will sell Dubai First, a consumer finance lender specializing in liability and credit card products, to First Gulf Bank PJSC for 601 million dirhams (US$163 million), the Abu Dhabi bank said in an e-mailed statement yesterday. Dubai First has 4.5 percent of the United Arab Emirates' credit card market.
"The sale is a strategic decision for Dubai Group and is part of our stated plan to sell down assets in order to support our broader ongoing restructuring process," Dubai Group CEO Fadel Al-Ali said in the statement.
Dubai Group's parent, Dubai Holding LLC, is one of the emirate's three main state-owned holding companies selling assets as Dubai and government-related entities prepare to repay about US$20 billion of debt next year. The company plans to sell its 35 percent stake in Tunisie Telecom, Tunisia's ministry for information and communication technologies said on Friday.
Dubai World, which roiled global markets in November 2009 when it asked creditors to delay about US$25 billion of debt maturities, agreed to sell UK warehouse developer EZW Gazeley Ltd earlier this month. The company will seek to push ahead with its own asset sales over the next two years as it needs to repay US$4.4 billion to creditors in 2015 and US$10.3 billion more by 2018, according to its repayment plan.
The Dubai First sale "is positive news as we are seeing more consolidation of assets between Dubai and Abu Dhabi," said Tariq Qaqish, head of asset management at Dubai-based Al Mal Capital PSC.
"There was the announcement of the merger between Emal (Emirates Aluminium Co Ltd) and Dubai, the talks of possible merger between ADX and DFM, and now Dubai First."
Dubai pulled itself back from the brink of default with US$20 billion from Abu Dhabi, the UAE's capital and largest sheikhdom, and the national central bank after state-linked firms' access to funds dried up during the financial crisis.
Dubai Financial Group, a unit of the government-owned company, will sell Dubai First, a consumer finance lender specializing in liability and credit card products, to First Gulf Bank PJSC for 601 million dirhams (US$163 million), the Abu Dhabi bank said in an e-mailed statement yesterday. Dubai First has 4.5 percent of the United Arab Emirates' credit card market.
"The sale is a strategic decision for Dubai Group and is part of our stated plan to sell down assets in order to support our broader ongoing restructuring process," Dubai Group CEO Fadel Al-Ali said in the statement.
Dubai Group's parent, Dubai Holding LLC, is one of the emirate's three main state-owned holding companies selling assets as Dubai and government-related entities prepare to repay about US$20 billion of debt next year. The company plans to sell its 35 percent stake in Tunisie Telecom, Tunisia's ministry for information and communication technologies said on Friday.
Dubai World, which roiled global markets in November 2009 when it asked creditors to delay about US$25 billion of debt maturities, agreed to sell UK warehouse developer EZW Gazeley Ltd earlier this month. The company will seek to push ahead with its own asset sales over the next two years as it needs to repay US$4.4 billion to creditors in 2015 and US$10.3 billion more by 2018, according to its repayment plan.
The Dubai First sale "is positive news as we are seeing more consolidation of assets between Dubai and Abu Dhabi," said Tariq Qaqish, head of asset management at Dubai-based Al Mal Capital PSC.
"There was the announcement of the merger between Emal (Emirates Aluminium Co Ltd) and Dubai, the talks of possible merger between ADX and DFM, and now Dubai First."
Dubai pulled itself back from the brink of default with US$20 billion from Abu Dhabi, the UAE's capital and largest sheikhdom, and the national central bank after state-linked firms' access to funds dried up during the financial crisis.
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