Creditors take action against Al Jaber in decade-long saga

Debt-laden Al Jaber struggled in the wake of the UAE real estate slump. (Supplied)
Short Url
Updated 23 September 2020

Creditors take action against Al Jaber in decade-long saga

  • The downturn in the Gulf construction sector has triggered a number of corporate restructurings as companies are forced to reschedule debt, raise fresh borrowing or enter insolvency protection

DUBAI:Creditors have started to enforce claims against Abu Dhabi-based Al Jaber Group, in a dispute triggered by a construction downturn in the UAE more than a decade ago.

Al Jaber, a contractor with interests across a range of sectors, has struggled since building up debt in the wake of a UAE real estate crisis and began talks with creditors in 2011.

Abu Dhabi Commercial Bank, which is working as restructuring and security agent, said in a document dated Sept. 21 which was seen by Reuters, that it had instructions from the majority of creditors to proceed with claims against Al Jaber.

A representative for Al Jaber did not immediately respond to a request or comment. ADCB declined to comment.

The move follows delays in restructuring agreements, under which Al Jaber was to appoint a new board and sell companies and assets such as the Shangri-La hotels in Dubai and Abu Dhabi.

In exchange, creditors had agreed to extend the maturity of a 5.9 billion dirhams ($1.61 billion) loan, cut interest rates, and provide additional revolving debt.

The initial enforcement action now being pursued by creditors includes the “acceleration and demand for payment of amounts outstanding” under the previously agreed debt restructuring, a source familiar with the matter said.

Enforcement will also allow creditors to claim against Al Jaber’s chairman under a 4.5 billion dirham loan to the company.

Several UAE companies have sought to extend debt maturities or agree better terms in recent years to avoid defaults, after an oil price crash hit energy services and construction.

The coronavirus crisis has added to the strain and Arabtec Holding, the UAE’s biggest listed contractor, this week will discuss options including dissolution after the pandemic hit projects and led to additional costs.

Meanwhile, Dubai-listed construction firm Drake & Scull is working to reach an agreement with its creditors in an out-of-court process.

The Kingdom vs. COVID-19

How Saudi Arabia acted swiftly and coordinated a global response to fight the coronavirus, preventing a far worse crisis at home and around the world

Enter


keywords

Dubai announces $136 million extra stimulus package

Updated 24 October 2020

Dubai announces $136 million extra stimulus package

  • The announcement takes Dubai's total stimulus measures this year to 6.8 billion dirhams

DUBAI: Dubai has announced a new 500 million dirhams ($136.14 million) stimulus package to support the local economy, taking Dubai's total stimulus measures this year to 6.8 billion dirhams, the crown prince of the emirate said on Twitter on Saturday.
"The private sector is a major partner in Dubai's development process, and we have adopted a set of new exemptions for some fees and a reduction in rents for some sectors, as well as an extension of the validity of a previous set of exemptions from fees," said Sheikh Hamdan bin Mohammed Al-Maktoum.