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

China aims for sustained and healthy economic development

Updated 30 October 2020

China aims for sustained and healthy economic development

  • Beijing to let market forces play decisive role in resources allocation, report says

BEIJING: China is targeting sustained and healthy economic development in the five years to 2025, with an emphasis on a higher quality of growth, the Xinhua news agency said on Thursday, citing the ruling Communist Party’s Central Committee.

President Xi Jinping and members of the Central Committee, the largest of the ruling party’s elite decision-making bodies, met behind closed doors from Monday to lay out the 14th five-year plan, a blueprint for economic and social development.

China’s external environment “is getting more complicated,” the agency said, adding, “There is a significant increase in instabilities and uncertainties.”

BACKGROUND

China aims to boost its gross domestic product (GDP) per person to the level of moderately developed countries by 2035, while GDP is due to top 100 trillion yuan ($15 trillion) in 2020.

However, the country’s development was still in a period of important strategic opportunities, despite new challenges, it said.

It added that China aims to boost its gross domestic product (GDP) per person to the level of moderately developed countries by 2035, while GDP is due to top 100 trillion yuan ($15 trillion) in 2020.

China will also deepen reforms and let market forces play a decisive role in resources allocation, the agency said.

China will promote a “dual circulation” model, make self-sufficiency in technology a strategic pillar for development, move to develop and urbanize regions, and combine efforts to expand domestic demand with supply-side reforms, it added.

The “dual circulation” strategy, first proposed by Xi in May, envisages that China’s next phase of development will depend mainly on “domestic circulation” or an internal cycle of production, distribution and consumption, backed by domestic technological innovation.