United Arab Emirates

A troubled Luxembourg brokerage has sought outside help to fulfil a crucial role in the restructuring of $1.2bn of structured bonds backed by defaulted airlines such as Air Berlin and Alitalia, the Financial Times reported. The fate of the $1.2bn of debt at two special-purpose vehicles tied to Etihad has been in the balance since last summer, after the collapse of Italian airline Alitalia and Germany’s Air Berlin. The Abu Dhabi carrier had snapped up stakes in the two airlines as part of an ill-fated push into Europe.

Some holders of $1.2 billion in bonds linked to Etihad Airways are seeking to appoint legal advisers to evaluate their options with respect to a potential default of the notes, sources familiar with the matter said. Etihad issued the bonds in 2015 and 2016 through an Amsterdam-based special purpose vehicle, called Equity Alliance Partners (EAP).

Dubai International Capital LLC reached an agreement with banks to roll over a loan of about $1 billion, Bloomberg News reported. The private-equity firm owned by the emirate’s ruler plans to extend the loan for three years and sign the agreement in the next few weeks. It’s the second time the firm is restructuring the loan. Banks are also asking DIC’s parent Dubai Holding LLC to pay $150 million under a payment guarantee as part of the first restructuring in 2012.

A Middle Eastern energy company that has questioned the lawfulness of its own sukuk won’t settle the $700 million worth of debt owed to investors, according to people familiar with the matter. Dana Gas PJSC, the Sharjah, United Arab Emirates-based energy producer, has no plans to repay the two mudaraba sukuk of $350 million in size each due Oct. 31, and the company is confident it will win a court case with bondholders, the two people said, asking not to be identified because the information is private, Bloomberg News reported.

Dubai’s Drydocks World has returned to the courts to push through a $2.1bn debt restructuring, clearing the path for the troubled ship-repair business’ sale to a sister company, DP World, the emirate’s port operator, the Financial Times reported. The maritime engineering business, a unit of the government-owned Dubai World conglomerate, in 2012 had to use bespoke insolvency legislation to finalise its first restructuring after a hedge fund won a judgment against the firm for defaulting.

A London lawsuit over $700 million in Shariah-compliant bonds issued by Dana Gas PJSC will go ahead despite a last-minute United Arab Emirates court order that attempted to stop the company from taking part in the trial, Bloomberg News reported. Dana Gas stunned investors and the Islamic finance community when it announced in June that it had reviewed its own bonds and found they were not Shariah compliant. Bondholders, led by Goldman Sachs Group Inc. and BlackRock Inc., hired investment bankers and then lawyers when it became clear they were facing losses of 90 percent or more.

Dubai’s DP World has agreed to buy Drydocks World and a maritime business park in the emirate for $405m. Ports operator DP World, majority owned by government conglomerate Dubai World, agreed to buy Dubai World’s Drydocks World ship repair unit via a cash injection of $225m. DP World also said it would buy another Dubai World unit, Dubai Maritime City, for $180m. DP World said the Drydocks transaction, expected to close before the end of the first quarter of 2018, was contingent on a successful completion of Drydock’s restructuring process, the Financial Times reported.

Dana Gas PJSC bondholders, including BlackRock Inc. and Goldman Sachs Group Inc., submitted a proposal to the Middle Eastern energy producer to resolve a dispute over a $700 million sukuk that shocked the Islamic finance industry this year, Bloomberg News reported. A person close to the company said the terms aren’t acceptable. The deal, which has support from over 70 percent of sukukholders, includes a cash pay-down of $300 million at par and a dual-listing of the company’s shares on the London Stock Exchange, the ad hoc committee of bondholders said in a statement.

To see how far Dubai has come, take a look at its credit default swaps. The extra cost investors pay to insure the sheikhdom’s bonds versus those of its oil-rich neighbor, Abu Dhabi, has fallen below 60 basis points this month for the first time on record, Bloomberg News reported. That’s down from 555 basis points back in 2009, when Dubai’s government-related companies were in talks to restructure billions of dollars in debt and Abu Dhabi came to the emirate’s rescue with a bailout. Dubai is a rare example of a Gulf economy that doesn’t rely almost entirely on oil revenue to fund expansion.

The standoff between Dana Gas PJSC and its bondholders took a fresh twist after the Middle Eastern energy explorer that’s trying to void $700 million of its own debt was said to believe investors may even have to pay the company, Bloomberg News reported. The Sharjah-based gas producer says a court battle with holders of the Islamic securities, or sukuk, may see it having to return less than 10 percent of the amount it borrowed, according to a person familiar with Dana Gas’s own analysis.