DUBAI: Creditors have started to enforce claims against Abu Dhabi-based Al Jaber Group, in a dispute triggered by a construction downturn in the United Arab Emirates 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 under the UAE bankruptcy law to reach an agreement with its creditors in an out-of-court process. ($1 = 3.6728 UAE dirham) - Reuters
Did you find this article insightful?