The investment group owned by Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, will delay reporting its results for last year by two weeks as it completes an internal restructuring. Dubai Holding Commercial Operations Group (DHCOG) has "extensively realigned its operating businesses, undertaken a conservative revaluation of its real estate portfolio, and has conducted a thorough impairment testing exercise across all its projects," the group said in a statement to Nasdaq Dubai.
It would report on May 16, the company said. "The deadline for reporting full-year results is normally 120 days, which means they would be due by the end of April," a spokesman for the Nasdaq Dubai said. A representative of DHCOG could not be reached for comment. DHCOG owns Dubai Properties Group, Sama Dubai, Tatweer and Jumeirah Group, the hospitality company that developed the Burj Al Arab. Until early December, there had been plans to merge the group's property units with Emaar Properties, the developer of the Burj Khalifa. But the deal was later called off by Emaar.
Analysts have questioned the group's financial footing since Dubai World put its US$24.8 billion (Dh91.09bn) debt restructuring proposals before creditors late last month. The ratings agency Standard & Poor's (S&P) said in January that the group's ability to generate cash was likely to be weaker than expected. S&P downgraded DHCOG's rating and then revoked the company's credit rating because of a lack of information.
Fitch Ratings and Moody's Investors Service, the other two major ratings agencies, have also downgraded the group. But JPMorgan Chase said in a recent report it expected DHCOG to avoid debt restructuring because its balance sheet and cash-flow profile appeared "sufficiently strong". "The company's contractors, despite being owed a substantial amount of money, are likely not in a position to trigger a default," the bank wrote.
"We do not expect DHCOG to go through a restructuring." A $555 million revolving loan owed by DHCOG comes due in July, but the bank said it was "comfortable" that the company would be able to refinance the debt. DHCOG is part of Dubai Holding, which also owns Dubai International Capital, a private equity and investment company, and Dubai Group. "The company's real estate development business continues to pose a significant risk to the rest of the company," JPMorgan said in its report.
"An adept management of balance sheet and cash flow, a favourable outcome of negotiations with contractors over payables and, possibly, financial support from the Dubai Government will be needed to place the company on a better footing." DHCOG also owns TECOM Investments, which operates Dubai Media City and Dubai Internet City, along with other free zones. firstname.lastname@example.org