Bank Islam’s major Dubai shareholder sued over US$10b debt
KUALA LUMPUR, Sept 13 — The Dubai Group, which owns a 30 per cent stake in Bank Islam, is being sued for immediate repayment of loans after talks aimed at restructuring the company’s US$10 billion (RM31 billion) in debts collapsed, the Financial Times reported today.
The paper reported that The Royal Bank of Scotland, Commerzbank and Standard Bank have launched “legal recourse available under the facility documentation” against the Dubai Group, an investment arm of the Dubai Holding conglomerate owned by Dubai’s ruler Sheikh Mohammed bin Rashid al-Maktoum.
The report added that the Dubai Group opened negotiations with its creditors in 2010 to restructure US$10 billion in debt, including US$6 billion owed to lenders and US$4 billion in intercompany loans with its parent.
The Financial Times also noted that the Dubai Group said it would continue to push for a consensual agreement, saying that 35 of its creditors continued to work towards a restructuring deal, with a number in agreement with its proposal.
The Dubai Group had tried to sell its 30.5 per cent stake in Bank Islam in 2010 but later withdrew its offer.
Bank Islam posted a pre-tax profit of RM470 million last year.
Apart from Bank Islam, Dubai Group’s assets include exposure to the Greek and Cypriot banking sectors, as well as stakes in regional investment banks Shuaa Capital and EFG-Hermes, said the Financial Times.