Arab News, Wednesday, Sep 23, 2020 | Safar 06, 1442
Creditors take action against Al Jaber in decade-long saga
Emirates: 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.