DIC Restructuring: Difficult Discussions Over Margin and Covenants?

Asa Fitch over at The National reports that discussions between DIC and its creditors over the proposed five-year rescheduling are focused on:

1. The margin. DIC would like 85 bp.  The lenders appear to be sensibly asking for more.  Though the precedent set by Dubai World's rescheduling is not in the lenders' favor.
2. The lenders would like covenants triggering default if certain levels of asset sales aren't met in the second and fourth years of the restructured facility.

While Asa's sources describe the proceedings as "fierce", the Company itself sees things proceeding smoothly.  

I suspect this will end up with a cosmetic change in the margin.  Hopefully, the banks have their eyes firmly on the prize (the more important point):  covenants to force asset sales.  An extra 100 or 200 bps is going to be cold comfort, if the banks can't force the return of their principal.  

There's nothing like the reluctance of an investor who bought at the top of the market to sell when markets are depressed.  He knows there's real additional value there and he has the loans to prove it.  Plus do I need to add The Vision.

Dubai: More Pain to Come

Tom Arnold over at The National has an article on the pain likely to come from Nakheel and Dubai Holding restructurings.

As well as a few quotes from the ratings downgrade of ADCB.  Sounds like Brother Eiraqat already needs more than two 1000 mg Dolgit.

Dubai Holding: Some Creditors Selling Debt

Asa Fitch over at The National reports that some creditors are looking to exit their exposure to Dubai Holding - DHCOG and DIC - through secondary sales at a hoped for modest discount.

This makes eminent sense in view of the many indirect costs associated with carrying distressed debt.  Costs of additional internal reporting and monitoring for credit purposes as well as for accounting purposes (both book keeping and disclosure).  

On top of all of this, if a creditor feels there is the possibility of an impairment, the decision to close the file  now, recognize the loss and move on may be highly appealing, particularly if there is no long term relationship.  Or if such a relationship is not perceived as being sufficiently profitable in the future.

Clearly, this strategy does not work with banks holding sizable shares.  Unloading a $5 million or US$10 million "bit" is a lot less painful than $50 million or US$100 million.

Dubai: Athens on the Creek?

Photograph by Tbc  Released to Public Domain

Martin Dokoupil at Reuters has a rather negative report on Dubai's financial condition quoting a Bank of America Merrill Lynch report that 

1. Dubai state owned companies are "sitting" on US$100 billion of debt of which US$30 billion comes due through 2012
2. Dubai's debt is 170% of GDP compared the article notes to Greece's 103%.

That last statistic sounds quite alarming.  But before you plunk down that deposit for an off plan villa at Palm Athena, recall that much of the US$100 billion was debt incurred by corporations not the sovereign itself.  In many cases entities with real businesses.  Emirates Airlines.  Emirates NBD.  Dubai Ports.   In several cases businesses that are incorporated outside of the Emirate.  Or whose main theaters of business activity are outside of the Emirate.

That doesn't mean that everything is just fine.  But rather as always one needs to look behind the headline or headline ratio to the details.

Dubai Holding Commercial Operations Group - Delays Payment Again Until 30 November

As per an announcement on Nasdaq Dubai, DHCOG is delaying payment on its US$555 million revolving credit facility until 30 November 2010.

In July it announced a two month delay in order to finalize legal documentation.   Perhaps, the drafting is being done by hand?

You'll recall that last January, DHCOG excoriated S&P for downgrading it, claiming in effect that the rating agency didn't know what it was doing.  This may indicate who was right in that debate.

You can use the tags "Dubai Holding" and "DHCOG" to access earlier posts.

DHCOG Secures Two Month Extension on US$555 Million Loan

This morning DHCOG reported on Nasdaq Dubai:

Dubai Holding Commercial Operations Group LLC (DHCOG) confirms that all parties have agreed to extend the existing Revolving Credit Facility (RCF) of $555 million under commercial terms for an additional 2 months. 

 The extension is required to facilitate the finalization of the documentation to renew the facility .

Moody's Downgrades DHCOG

Asa Fitch at The National has an article on Moody's recent downgrade of DHCOG.

"The credit ratings agency downgraded Dubai Holding Commercial Operations Group (DHCOG) by one notch on its rating scale to “B2” from “B1”and kept it on review for another drop. DHCOG, which has large holdings in the hospitality, business parks and property sectors, was unavailable for comment. The group was downgraded to “B1” last December, a rating already considered below investment grade."

You'll recall that last January, Dubai Holding had excoriated S&P for its:

1. manifest "lack of understanding of DHCOG's business, its operations and relationship with the Government of Dubai." 
2. "inaccurate statements coupled with factual errors that are misleading."  

While it may be unclear to some if Moody's is suffering from the same affliction or if S&P was indeed right after all, there's no confusion here at Suq Al Mal.

Dubai Properties to Countersue Hopkins

Quoting an item in Reuters, Business Maktoob says that DP has indicated it will countersue Hopkins Architects for damages it suffered when HA stopped work on Central O8 towers.

Maybe, DP is reading SAM?  Realistically, probably not.

British Architectural Firm Sues Dubai Properties for AED27 Million (US$7.3 Million)

Bradley Hope over at The National reports that Hopkins Architects, a major UK architectural and engineering company, is suing Dubai Properties in the DIFC Court  (Court Case CFI 034/2009) for AED27 million (US$7.3 million) for what it claims are unpaid fees and costs it has incurred in connection with Central Park 08, a set of twin 50 storey towers next to the DIFC.

As per the DIFC Courts website, Dubai Properties has until 12 July 2010 to present its defense.

This amount is rather small beer in financial terms.  And failure to pay reflects either a very serious commercial dispute.  Or a rather severe cash crunch at Dubai Properties.

The article leaves the impression that HA stopped work because of non payment and then DP sought to cancel the contract.  Assuming this is correct, it would seem then that DP would owe HA for work to date less any deductions for any damages it can claim against HA.  From the article it sounds as though DP is not raising any counterclaim against HA, though it may still be early in the legal game.

In any case, I am taking comfort as I suppose we all should by the recent words of a high placed guy in the Emirate who should know the score.  While this quote refers to Dubai World, I'm sure that it probably equally applies to Dubai Holdings.

"I'm not worried about the company, the company has got the wealth. So they have something, and they will come back very very quickly."

Though I'll confess I'm not so confident about HA collecting its receivable.

DIC Cashes Out of Merlin (Madame Tussaud's)

Asa Fitch over at The National reports that DIC has sold its remaining 6% stake in Merlin to CVC.  No doubt an element of cash need drove the sale, though DIC received the lion's share of its return in 2007 when it received GBP 1 billion in cash plus 17% of Merlin.  This is compared to the purchase price of GBP800 million in 2005.  

The additional amount for the sale to CVC is icing on the cake.

According to CVC's press release on the sale, the ownership of the Company is now KIRKBI 36%,  Blackstone 34%, CVC 28%, management 2%.

With no single investor holding majority control, managing the Company will be a bit trickier than if there were a dominant shareholder.   

On the other hand, a distinct benefit is that cash calls for new equity (if any is required) will not fall disproportionately on any one shareholder.  

The Company needs cash to fund its "ambitious growth programme" as the CVC press release states.  And there is the unfortunate bunching of loan maturities - the extension of which is being negotiated currently.  Both potential cash demands.

Additional debt financing is unlikely.

The CVC press release also states that "Merlin does not intend to increase its financial leverage."   I suspect that the decision reflects more than sober financial self-discipline. Bankers are now less willing to lever up the company than they were during the  "Bonny" days when Charterhouse owned Madame Tussaud's.  Then loans were abundant.  And with easy terms - long dated bullet loans.    

That leaves additional equity.

Last October, the Financial Times reported that Merlin would IPO in 2Q10 with the transaction mooted at some GBP2 billion.  The sale to CVC suggests that the IPO route is not as likely as there is little reason for Blackstone to reduce its position in a trade sale if an attractive IPO is imminent. 

The remaining source is private equity - and perhaps a rationale for several rather than one dominant shareholder.

Hashem al-Dabal Released After Repayment of AED130 Million

Business Maktoob reports that Hashem al-Dabal, former Chairman of Dubai Properties, has been released after repayment of AED130 million he allegedly embezzled in his former position.

Dubai Holdings: Detailed Comments on DHCOG 2009 Audited Financials

Further to my post of 5 June, it's time for a closer look at DHCOG's 2009 audited financials.

Before getting into my usually overly detailed analysis, I'd like to highlight some big picture themes that emerge from a review of the Company's 2009 financials.

1. Most commentary has focused on DHCOG's AED15.2 billion in Borrowings. But as with Nakheel, Trade Payables (AED32 billion) and Customer Advances (AED14.2 billion) are more critical obligations. Both in terms of amounts as well as their greater direct impact on the future of the company and the local economy. When various expenses of AED4.7 billion associated with the restructuring/reduction of its projects in process (termination payments, legal claims, etc) and AED1.7 billion in Contractor Retentions (primarily due in the next 12 months)  are added in, it's clear where the potential cashflow stress really is. 
2. As noted earlier, the Company is heavily dependent on Government Subsidies for its profitability. 
3. Severe deterioration in Trade Payables – only 31% of gross receivables are fully performing as compared to 73% the year earlier. In itself this is a relatively minor problem since these represent a small "slice" of total assets. What's more important is that they reveal the profound distress in local markets. 92% of DHCOG's Receivables are denominated in AED and so are with local companies. If you think about it, the last company a local debtor is likely to "stiff" is this Company which is owned by the local Shaykh. Either DHCOG was reaching for business – doing marginal business or these companies are in very dire straits. 
4. DHCOG also seems to have engaged in a rather large amount of investment activity unrelated to its core activities. And with significant amounts committed to other entities within the Group. A clear sign that the companies were not managed in a disciplined fashion but rather as part of a "Group" – similar to the pattern in Kuwait.
   

Now to the detailed comments. (Warning:  A cup of caffeine may be required to remain awake as you read what follows).
 

Balance Sheet

Investment Property (Note 6) (page 45) is carried at AED56.5 billion in 2009 down from AED60.3 billion the year earlier. In 2009 DHCOG recognized an AED27.2 billion impairment charge against Investment Property. AED6.9 billion of this was reflected in the income statement. The remaining AED20.3 billion was reflected as a reduction in Government Grants. Thus, bypassing both the income statement and equity. (More on that topic a bit later).

While DHCOG carries its Investment Property at cost less impairment, it also provides details on fair value. Based on an open market valuation, the fair value of Investment Property at FYE 2009 is reported as AED 81.6 billion down from AED141.8 billion at FYE 2008. Clearly, there is a very serious disconnect between the value of the property calculated using discounted cashflow ("DCF") (which is the basis for the impairment) and the market price (based on what some "wise" investor is believed to be willing to pay for the property). That gap is AED25.1 billion. 

The "market" price is 144% of the price determined using discounted cashflow. Even allowing for the impact of some conservatism in the DCF, the gap is too large. What that suggests is that market price remains high. Essentially when market values like this occur, the implied "capitalization rate" ("cap rate") of the rental streams is very low.   Unrealistically low.

Turning to the liability side of the balance sheet, it's clear that Borrowings (Note 28) (page 69) at some AED15.2 billion are not the Company's major liability problem. Current and non current payables of AED32.1 billion are more than twice Borrowings (Note 32 (a) page 74). Customer Advances of AED14.2 billion (Note 33) (page 75) represent much more significant and potentially critical demands on cash. Of particular note is that all Customer Advances are carried as Current Liabilities – meaning DHCOG has to complete projects within the 2010 to satisfy its obligations to customers. As it builds and hands over properties, then these obligations are extinguished. If it fails to do so, there is potential (note that word) requirement to reimburse customers or renegotiate with them.  And these are not all the liabilities towards the "trade" that the Company faces.  There's an additional AED4.7 billion for Provisions and Other Charges - largely related to termination of contracts.

Another key liability account is the AED36.8 billion in Government Grants (Note 29) (page 72). As discussed in my earlier post (referenced above), DHCOG's profitability and cashflow is essentially based on generous subsidies from the Emirate of Dubai. Strip these out and the Company's performance is much diminished. Notes 2.22 (a) and 6 also discuss Government Grants.

Income Statement

Here the role of Government Subsidies is directly obvious. In 2008, the Company had AED19.2 billion in subsidies and had net income of AED9.8 billion. In 2009, subsidies were only AED0.6 billion. That and substantial provisions led to a loss of AED23.6 billion.

As a side comment, I'd note that there are provisions of some AED2.2 billion included in "General and Administrative" expenses (Note 38) for trade and other receivables as compared to a mere AED0.1 billion in 2008. A strong indication of the distress in the local market.

Consolidated Statement of Cash Flows

See the comments in my earlier post. Cashflow generation is constrained. And to flog a downed horse highly dependent on government subsidies.

Detailed Comments

Here are some items that caught my eye.

Note 2.1 (page 8) – The auditors did not raise a matter of emphasis on management's assumption that DHCOG as a "going concern" because of the availability of external support from the Holding Company and the DFSF.

"As a result of the sudden and sharp downturn in the Dubai real estate market, the Group's cash flows have come under severe pressure. The Group is currently considering various means to manage its cash flows which include roll over of maturing loans, sale of certain assets and renegotiation of trade and contractors balances. The holding company has confirmed its willingness to provide such financial support as may be required to manage the process and has confirmed that it has access to funds from the Dubai Financial Support Fund for the specific purpose."

Note 2.23 (a) (page 28): DHCOG primarily recognizes revenues from land and building sales on a "completed" contract basis as opposed to a "percentage of completion basis". What this means is that there is likely to be a greater mismatch between the timing of cash receipts and the recognition of revenues. When cash is received before the contract is completed, the contra entry to the receipt of cash is "Deferred Revenues". As per Note 32 (a) (page 74) DHCOG has some AED17.1 billion of Deferred Revenues as of FYE 2009. When these revenues are recognized in the Income Statement, there will be no accompanying cashflow. Something a careful creditor should have his or her eye firmly fixed upon.

 

Note 3.1 (c) (page 34): Of some AED24.7 billion in liabilities due within the next twelve months, repayment of borrowings represents only AED3.7 billion. Roughly 15%.

 

Note 4.2 (b) (page 39): Management has estimated its liability for contractor claims for termination or delay of contracts for construction and consultancy, demobilization of contractors, staff repatriation costs, etc., at AED4 billion. Up AED1.4 billion (54%) from 2008.

 

Note 12 (page 56): The Company recognized AED1.5 billion fair value loss in 2009 for its investment in a fund managed by a related party Dubai International Capital. This is in addition to AED1.9 billion fair value loss on the same investment in 2008. Also see Note 20 (a) page 65.

 

Note 15 (page 60): There is clear distress in DHCOG's Trade Receivables. At FYE2008 AED1.9 billion (83%) of DHCOG's AED2.3 billion in Trade Receivables and Advance Payments were "fully" performing. At FYE2009 AED0.8 billion (58%) of AED1.4 billion were. At year end 2009 AED0.8 billion of AED2.6 billion in gross Trade Receivables were fully performing. That's 31% fully performing. At 2008 the comparative numbers were AED1.9 billion out of AED2.6 billion. Or 73%. Past due but unimpaired receivables also showed a jump from AED0.4 billion at FYE 2008 to AED0.6 billion at FYE 2009. This is significant deterioration in a single year. And reflects widespread distress given DHCOG's comment that it "has a broad base of customers with no concentration of credit risk within trade receivables". Looking at currency composition of receivables, some 92% are denominated in AED. That indicates most of these are to local counterparties. So the distress is local. And it must be significant since it's highly unlikely that a local company would "stiff" a company owned by the Ruler. Generally, when there is a serious sudden deterioration in receivables, the suspicious banker takes a look for an APP scenario. Sales or other transactions against receivables can be a highly convenient way of spiriting value out of a company. Since there is no concentration in the receivables, this probably can be ruled out.

 

Note 28 (page 71): DHCOG failed to comply with 2 of 3 financial covenants as of 31 December 2009. It bankers waived these breaches. That means the covenants remain in place. Given the Company's financial condition, they are likely to be breached again. And the creditors will have another chance to use these to apply pressure.

 

Note 30 (page 72): AED1.1 billion of AED1.7 billion in Contractor Retention payments are due within one year. Two observations. The first is the contractual cashflow demand this represents – though contracts may be renegotiated. The second is that this shows that there have been no significant new construction activities undertaken. Another sign of the slowdown.  (Note:  These liabilities are included in Trade and Other Payables).

 

Note 32 (a) (page 74): AED17.1 billion of Deferred Revenues. As discussed above, when these are recognized, there will be no accompanying cashflow.

 

Note 32 (b) (page 75): Provision for Liabilities and Other Charges is at AED4.7 billion up from AED3.0 billion (2008). Important as another potential cashflow demand. As well, this amount has grown rather significantly in one year. Future trends in these provisions should be watched. Note 46 (page 82) has additional information.

 

Note 38 (page 77): General and Administrative Expenses of AED4.7 billion include AED2.2 billion for impairment provisions on Trade and Other Receivables.

 

Note 40 (page 77): Other Operating Expenses provides details on the composition of provisions.

 

Note 42(a) (page 82): The Company eliminated its commitments to invest in private equity funds from AED259 million in 2008 to zero in 2009. It's unclear why an Operating Company like DHCOG is investing in private equity funds. Nor why it was investing rather substantial sums in the DIC fund on which it has lost some AED3.4 billion.

 

Note 42 (b) (page 82): As DHCOG has scaled back its projects, Commitments for Projects in Progress have declined dramatically from AED34.2 billion in 2008 to AED10.9 billion in 2009. The trade-off is increased Termination Claims.   Clearly, one does not shrink oneself to greatness.  Reduction in contracts is a necessary step given the state of the real estate market in Dubai.  All well and good.  But the question then is what is the future for DHCOG.  If its real estate business is reduced to a more modest level what does this mean for the Company - particularly since its profitability was basically driven by selling real estate it acquired at zero cost due to the kindness of the good Shaykh.

Dubai Holding Dissolves DIC Board and Takes Direct Control

GulfNews reports that Dubai Holding announced that it had dissolved the Board at DIC and taken direct control over the Company.  The cover story is that this was done to "implement a new (corporate) governance structure".

I suspect that as well it reflects a new corporate strategy.  Given the less than sterling performance of DIC and much more limited resources available to Dubai going forward, the Emirate has probably wisely decided to slowly unwind DIC.  That grandiose dreams of an international empire will have to be shelved in favor of making sure the economy back home is taken care of.  

The first step on the new path will be trying to get creditors to extend maturities until markets improve and assets can be sold.  Then triage on the existing portfolio.  Letting those entities that cannot be saved go.  And focusing limited cash on retaining control of and building value in those that have potential for a price rebound.

No longer on the Board of DIC, Samir AlAnsari will have a new role at Shuaa Capital.  Instead of building an empire through acquisition, he'll be tasked with building a business the old fashioned way - disciplined growth.

Dubai Holdings: Review of DHCOG 2009 Financials – The Business Model

DHCOG's 2009 audited financials as well as the CEO's commentary are available at this link at NasdaqDubai. Earlier audited financials are in the "Related Documents" section here.

Before I get into detailed comments on the 2009 annual report, I'd like to start by looking at DHCOG's business model, particularly its ability to generate cash. This will provide context for understanding DHCOG's ability to address the issues it faces.  A robust cashflow can pay bills directly.  And, if they are lumpy, a sound cashflow provides a basis for accessing finance to pay bills immediately.

In that regard, DHCOG is heavily dependent on Government Grants for both income and cashflow.

Let's start with net income

All amounts in AED billions. Percentage = Government Grants/Net Income.

	2009	2008	2007	2006	2005
Net Income	(23.6)	9.8	13.9	7.6	1.5
Govt Grants	0.7	19.2	10.0	6.6	0.7
Percentage	NM	196%	72%	87%	47%

 

Notes 2.22 (page 27) and 29 (page 72) in the 2009 financials discuss respectively the accounting treatment of subsidies and the amounts involved. 

With respect to the first, when the Government gives DHCOG land, the Company records the land as an asset with the contra entry to the liability account "Government Grants". Upon sale of the land, DHCOG recognizes profit based on the cost of the land. It then also recognizes the gain on the Grant as a separate item. This enables readers of the financials to determine the value added by DHCOG  through its own efforts by separating out the subsidy it has received.

A hypothetical example illustrates the point. 

Let's assume that the Emirate gives the Company a piece of land fair valued at AED100 on 1 January 2009. DHCOG books an addition to Land of AED100 and reflects a liability of AED 100 under Government Grants.  Then assume a sale on 1 July 2009 for AED 110. The Company's total profit is the sale price AED110 since it paid zero for the property.  In its accounting, DHCOG splits the AED 110 into two components:  AED10 in "Revenues" and AED100 in Government Grants.  In this case the Company is only responsible for 9% of the profit. The subsidy for 91%.

That was a hypothetical example.  Let's look at actual profitability.  Over the period 2005 through 2009, the Company earned AED9.2 billion. During the same period, Government Subsidies  were AED37.2 billion. Or 4.04 times net profit! In fact without the subsidies, DHCOGwould have had a net loss of AED28 billion.

As a side comment, the subsidies result in an interesting transfer of wealth from the Emirate to the private company owned by the Ruler of the Emirate.

The pattern is the same when we examine Cashflow From Operations (2009 Note 47).

Again all amounts are in AED billions.

	2009	2008	2007	2006	2005
Gross Operating CF	2.1	5.4	4.7	2.1	0.6
Net Operating CF	0.8	10.0	16.9	4.6	1.3
Govt Grants	0.7	19.2	10.0	6.6	0.7
Govt Grants/NOPCF	88%	192%	59%	143%	54%
Customer Advances	(4.2)	0.5	2.7	8.2	4.5
Deferred Revenues	3.3	7.0	6.4	0.3	NM

 

Not surprisingly, the above table shows a similar critical dependence on Government Subsidies, this time for cashflow. In four out of the five years, Government Grants were larger than Gross Operating Cashflow – that is Cashflow before changes in long term assets and liabilities and short term assets and liabilities (e.g., Working Capital).   By way of explanation, Gross Operating Cashflow is a better measure of the ability of a firm to generate cash from its operations than Net Operating Cashflow as the latter involves transient sources and uses of cash not resulting from the basic business process.

Another key component of cashflow has been customer advances (deposits) on purchases. As the real estate sales machine slows down so will the pace of new investments by clients.  As the Company's CEO, Ahmad Bin Byat, noted in his commentary on 2009, "The real estate market is expected to continue to face challenges in 2010 and 2011 until the excess supply of the existing and expected inventory is absorbed by stronger demand." That likely means no real meaningful additions to Customer Advances. Rather these will be drawn down. And if the recovery in 2012 is delayed or tepid, the situation will continue.

Also the Deferred Revenues point to another issue for the future.  The Company has been receiving cash for projects underway. These cash receipts have been booked as deferred revenues.  That is cash  is received but income is not recognized.  When the projects are completed and handed over, DHCOG will book substantial revenues. As of 31 December 2009, the amount of outstanding Deferred Revenues was some AED17.1 billion. However, when it does, these revenues will not be accompanied by cashflow of this amount.   To the extent that liabilities have increased during this period, a creditor would have to ask where the Company will get the funds to settle these obligations.

As hopefully this analysis makes clear creditors face two issues with DHCOG. The first largley trivial. The second critical. 

1. Continuance of Government Subsidies. A slowdown in real estate may mean an inability to utilize the remaining Government Grants, AED36.8 billion at 31 December 2009, in line with the "Master Plan's" timing. Theoretically, this could result in termination of the grants or a change in the their cost basis. However, since the good Shaykh is giving himself land, he is probably inclined to revise the terms of those grants to accommodate any slowdown. The maintenance of subsidies is the key to the Company's ability to generate significant net income and more importantly the cash necessary to repay debts. With a zero cost of land, the Company is uniquely positioned even  if real estate prices are sharply lower.  It also benefits because it does not have to finance the land prior to sale. No need to raise debt, leaving "spare" borrowing capacity, assuming it has access.  And no interest expense, improving both the bottom line and cashflow.
2. The overall state of the real estate market. While it's highly likely that the Shaykh will continue to see the wisdom of granting land to DHCOG, the real question is whether there will be significant demand for new projects. Property in the Company's "land bank" will do creditors little good if it cannot be sold. As noted above, Byat does not expect a recovery in the next two years. And there are some critical amounts due in that period.  And if he is wrong about the vigor or timing of the recovery, the situation will be even more difficult.

With this the stage is set for a second post on the 2009 financials.
 

Dubai Debt Rescheduling Watch: Dubai Holdings Commercial Operations Group Misses Doctor's Appointment

Following up on Frank Kane's earlier article at The National, I was eagerly anticipating reading DHCOG's financials at Nasdaq Dubai.  Sadly they weren't posted.  Seems DHCOG missed its appointment.

Dubai Debt Rescheduling Watch: Check-Up Time for Dubai Holdings

Photographer’s Mate 2nd Class Johansen Laurel - Picture in Public Domain

As Frank Kane at The National reports, DHCOG's financials are supposed to be out "later today".  And when released will give an insight into Dubai Holdings' financial position.

Moody’s, another one of the other large ratings agencies, still issues reports on DHCOG and recently issued a relatively upbeat assessment.

Nonetheless, Moody’s also confirmed that it rated DHCOG at “B1 and under review for downgrade”. 

Dubai Debt Rescheduling Watch: DIC Sells All Liquid Securities?

 
Here's a report from Maktoob Business that DIC has sold the last of its listed securities.

You Said What?: Europe Can Learn Debt Management from Dubai

The following was reported in The National on 26 May.

European countries grappling with Greece’s financial crisis could learn from Dubai’s handling of its own debt problems, Sultan Ahmed bin Sulayem, the chairman of Dubai World, said yesterday.

The Dubai Government had intervened positively to provide a solution to the emirate’s debt problems and ensure no banks were in financial danger, Mr bin Sulayem said.

Dubai’s response to the financial crisis “should be adapted and learnt by the European countries in facing and tackling the crisis in Greece”, he said during a speech in Dubai yesterday.

From the Gulf News 27 May: "DIC Seeks Three-Month Repayment Delay".

"It is not a standstill. It is a request for extension of maturity,"  "The extension period would allow the implementation of a consensual longer term plan that would enable DIC to maximise the value of its business for the benefit of all its stakeholders,"

From the Financial Times 9 May:  Dubai Holding Advisers Engaged".

From Trade Arabia 26 May:  Dubai Holding Debt Restructuring "Risk Mounts"

"Dubai Holding is seen as the next subject of the emirate's debt restructuring programme which started with Dubai World in November, Saud Masud, head of research for the Middle East and North Africa at bank UBS, said in an interview.
'We believe Dubai Holding has roughly $15 billion in loans and bonds but this does not include any off balance liabilities arising from investor or end-user default on properties that have dramatically declined in 18 months,' Masud said."

From the Financial Times 27 May, Simeon Kerr reporting.

"Government cash flows remain meagre and analysts worry about its ability to raise more debt in the current environment. The banking system remains tight and in need of more liquidity to finance businesses and real estate projects.

UBS, for example, has said Dubai developers may need to raise another $11bn to finish semi-complete the real estate projects that haunt the city.

More hard work is necessary for Dubai to turn the corner."

If you decided to swim the Channel and had to be pulled out by the scruff of your neck in order to save your life, it's probably not a good idea to boast about your aquatic and athletic prowess.  If other members of your family are still flailing around in the water, it's probably an even better idea to avoid making similar comments about your family's skills.

Competition: Revise That Corporate Slogan

Taking a cue from a post from Farmer Joe, Suq Al Mal launches its First Annual "Revise That Corporate Slogan" Competition.

Entrants may submit their entries by posting a comment.

And may, if they wish, suggest other firms whose slogans may need updating or revision.

Here are our two initial candidates: 

1. Dubai Holdings - For the good of tomorrow.
2. Dubai World - The Sun Never Sets on Dubai World

 

Dubai Holdings Commercial Operations Group - Still No Financials

Well, "bukra" is in the official slogan of the Holding Company so this isn't a surprise I suppose.

DHCOG announced today on the Nasdaq that it still didn't have its financials finalized.

"Dubai Holding Commercial Operations Group LLC (“DHCOG”) has further extended the publication date of its 2009 consolidated financial statements, due to the complexities of consolidating the financial results of its various operating businesses across multiple geographies. In accordance with the rules and regulations set forth by the listing authority at Nasdaq Dubai, the voluntary suspension of listing on the exchange of DHCOG’s Medium Term Notes remains in force until DHCOG issues its Audited 2009  Financial Statements and Annual Report on or before May 31, 2010".

Remind me, did DHCOG buy a lot of new foreign subsidiaries in 2009?