Dubai Holding, the investment group owned by the emirate’s ruler, has reached an agreement with creditors to delay repayment of 1.9 billion euros worth of debt.
Dubai Holding’s private equity arm – Dubai International Capital – will extend most of its outstanding bank loans by five years at an interest rate of two percent.
Dubai International Capital gave no details on how it plans to repay the debt at maturity but the private equity firm has been selling assets.
It has stakes in British-based budget hotel chain Travelodge and German alumina products maker Almatis .
The deal, which comes after nearly two years of talks, is another milestone in Dubai’s effort to rebuild its credibility.
Investors fled the region after state-owned conglomerate Dubai World said it could not repay nineteen billion euros it owed.
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.