Bankers, analysts and others in the financial industry gathered at the Hotel Atlantis for the meeting.
Bankers, analysts and others in the financial industry gathered at the Hotel Atlantis for the meeting.

Outlook brightens for Dubai



Dubai's economy passed important milestones yesterday as the Dubai World conglomerate presented its final debt restructuring plan to bankers while the emirate's largest developer posted a big rise in quarterly profits. After more than a year of subdued property sales, Emaar Properties posted a net profit of Dh802 million (US$218.3m) for the second quarter after a loss of Dh1.2 billion in the same period last year.

Profits also rose 6 per cent from the first quarter this year as homes were delivered in Burj Khalifa, the tallest tower in the world. Dubai World, meanwhile, unveiled a debt restructuring proposal to its remaining 66 bank creditors, after which the company said it "expects to complete the restructuring over the coming months". Analysts hailed the restructuring talks and Emaar's profits as a sign that things were looking up in Dubai.

"It's a move in the right direction," said Robert McKinnon, the chief investment officer at ASAS Capital. "However, it's not an overnight switch meaning that everything will be perfect and rosy in Dubai." Revenue from Emaar's retail and hospitality divisions, the opening of the Armani Hotel in Burj Khalifa in April and contributions from overseas projects also helped to boost the developer's income.

"A big portion of revenues has come from Dubai Mall and other leasing space in Dubai as well as their hotel portfolio," said Majed Azzam, a property analyst at Al Futtaim HC Securities. "There are indications of recovery in the tourism industry in Dubai, which saw occupancy levels rising towards the end of the first quarter and into the second quarter over last year." Restructuring talks between Dubai World and its creditors started in November when the conglomerate announced it would seek a standstill on debt repayments.

Dubai World, which owns the property developers Nakheel and Limitless, yesterday made a presentation to bankers at a meeting at the Atlantis Hotel after its seven biggest lenders agreed to the broad terms of the plan on May 20. Having secured the approval of the seven banks to move forward with a plan to restructure $14.4bn of bank loans into five and eight-year loans, the conglomerate was seeking agreement from 66 smaller creditors that hold about 40 per cent of the debt the company is looking to restructure.

Under the plan, $4.4bn is to be repaid over five years at a flat 1 per cent interest rate. Another $10bn is to be paid out over eight years, with terms that include government guarantees, a payment-in-kind at the end of the loan and extra interest for banks that lent to Dubai World in dirhams. In a document outlining the plan and seen by Reuters, Dubai World said the repayment of the initial $4.4bn would be financed by its Istithmar World portfolio and its Infinity World investment arm - two segments that were ringfenced from the conglomerate's debt proposal.

The meeting came a week after Nakheel, the developer of the Palm and World projects, presented financial creditors with proposals to deal with billions of dollars of debt. Nakheel owes about $10.5bn to banks, contractors and customers, with financial creditors thought to account for about $4bn of that total. Trade creditors have already started to receive payments as part of the first phase of its repayment plan.

It was also announced earlier this month that Limitless, which had planned to build an 11km canal through Dubai, would come under the management of Nakheel although it is unclear how Limitless's own debts would be repaid. Property sales in Dubai were badly hit by the financial crisis, with prices falling as much as 50 per cent and further falls are predicted as new property comes on stream. "Emaar is more healthy than other real estate companies as they got into the game earlier and didn't get caught in the middle of the cycle like other property companies," said Mr McKinnon.

"But there are a lot of issues with smaller developers and smaller property units that need resolving."

* With additional reporting by Tom Arnold

agiuffrida@thenational.ae

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UPI facts

More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions

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The%20specs
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The specs
Engine: Long-range single or dual motor with 200kW or 400kW battery
Power: 268bhp / 536bhp
Torque: 343Nm / 686Nm
Transmission: Single-speed automatic
Max touring range: 620km / 590km
Price: From Dh250,000 (estimated)
On sale: Later this year
COMPANY PROFILE
Name: HyperSpace
 
Started: 2020
 
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
 
Based: Dubai, UAE
 
Sector: Entertainment 
 
Number of staff: 210 
 
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
MATCH INFO

Uefa Champions League semi-final, first leg
Bayern Munich v Real Madrid

When: April 25, 10.45pm kick-off (UAE)
Where: Allianz Arena, Munich
Live: BeIN Sports HD
Second leg: May 1, Santiago Bernabeu, Madrid

COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
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Squad: Majed Naser, Abdulaziz Sanqour, Walid Abbas, Khamis Esmail, Habib Fardan, Mohammed Marzouq (Shabab Al Ahli Dubai), Khalid Essa, Muhanad Salem, Mohammed Ahmed, Ismail Ahmed, Ahmed Barman,  Amer Abdulrahman, Omar Abdulrahman (Al Ain), Ali Khaseif, Fares Juma, Mohammed Fawzi, Khalfan Mubarak, Mohammed Jamal, Ahmed Al Attas (Al Jazira), Ahmed Rashid, Mohammed Al Akbari (Al Wahda), Tariq Ahmed, Mahmoud Khamis, Khalifa Mubarak, Jassim Yaqoub (Al Nasr), Ali Salmeen (Al Wasl), Yousef Saeed (Sharjah), Suhail Al Nubi (Baniyas)

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Museum of the Future in numbers
  •  78 metres is the height of the museum
  •  30,000 square metres is its total area
  •  17,000 square metres is the length of the stainless steel facade
  •  14 kilometres is the length of LED lights used on the facade
  •  1,024 individual pieces make up the exterior 
  •  7 floors in all, with one for administrative offices
  •  2,400 diagonally intersecting steel members frame the torus shape
  •  100 species of trees and plants dot the gardens
  •  Dh145 is the price of a ticket