Dubai Holding arm hit by net loss

By Simeon Kerr  www.ft.com

The non-financial arm of Dubai Holding, the group owned by the emirate’s ruler, yesterday reported a 2009 net loss of Dh22.8bn ($6.2bn).

Dubai Holding Commercial Operations Group’s loss was mainly due to real estate impairment charges amid the tumbling Dubai property market and was announced as the unit holds talks with banks to refinance a $555m loan. DHCOG said revenues had fallen by 28.5 per cent to Dh9.5bn in 2009.

The results mark another step towards dealing with the emirate’s $109bn gross debt after another conglomerate, Dubai World, secured initial agreement with banks on a proposed $23.5bn debt restructuring.

Units of Dubai Holding – owned by ruler Sheikh Mohammed bin Rashid Al Maktoum – are negotiating with creditors to extend parts of the group’s $12bn gross debt. DHCOG said it expected the Dubai real estate market to stabilise this year and recover in 2011. But some analysts are concerned that upcoming supply will outmatch demand and cause prices to decline further.