Dubai World made a final payment of $8.2 billion to creditors two years ahead of schedule, completing a debt restructuring that weighed on the emirate for almost a decade.
The government-owned conglomerate made the payment -- due in September 2022 -- using funds from asset sales, dividend payments and the delisting of port operator DP World Ltd., it said in a statement on Tuesday. The company has repaid $18.9 billion to creditors since 2011.
Dubai is tackling its debt pile as the emirate seeks to address the economic fallout of the coronavirus pandemic. The Middle East’s main business and travel hub, which is emerging from weeks of lockdown, is especially vulnerable given its reliance on tourism and trade. A prolonged property slump and a retail sector that’s struggling are also weighing on the city.
“The full repayment represents an important milestone for both Dubai World and for Dubai,” Dubai World Chairman Sheikh Ahmed Bin Saeed Al Maktoum said in the statement. “Dubai World will focus on streamlining and strengthening its efforts to deliver long-term value for all stakeholders.”
The current economic downturn is a reminder of the 2009 financial crisis that forced Dubai World to restructure $23.5 billion of debt and saddled property developer Nakheel PJSC with $10.5 billion of unpaid bills. Dubai and various government entities held combined outstanding debt of $123 billion, or about 110 percent of its gross domestic product, according to figures at the end of August 2018 cited in a report by the International Monetary Fund.
The repayment was achieved through:
• Funds, including $6 billion from Port and Free Zone World
• Asset sales, including the sale of Economic Zones World for $2.7 billion
• Dividend payments from portfolio companies, including $1.6 billion dividend from Infinity World
• New $3 billion loan from Dubai Islamic Bank