Wednesday, September 15, 2010

DIC Asks for More Time

According to the Khaleej Times DIC has asked the lenders on its US$1.25 billion facility to extend the maturity until the end of November. Earlier it had been extended from the end of June until the end of September.  The article also states that the Company has circulated a draft rescheduling plan that envisions asset sales over a five to seven year plan.  

“They [DIC] are buying some time because markets go in cycles and currently assets are stressed and below their value,” said Haissam Arabi, chief executive and fund manager at Gulfmena Alternative Investments.
“We are on our way to reach a new cycle as soon as the fourth quarter...when we will see valuations and share prices expanding,” he said. DIC had already extended the $1.25 billion loan, which matured in June, to September 30. 
Sadly we learn that markets often undervalue assets from their true value (the value imagined by the holder) for long times.

And equally sadly, while it appears the Obama Administration's stimulus plan is working, it seems that tangible effects won't be felt until after the November elections.

Earlier post here.

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