Dubai Holding, the investment conglomerate owned by the emirate's ruler, said its private equity arm has reached an agreement with creditors to restructure $2.5 billion of debt, ending nearly two years of talks. Dubai International Capital, which has stakes in British-based budget hotel chain Travelodge and German alumina products maker Almatis, will extend $2.15 billion of outstanding bank loans by five years at an interest rate of 2 percent. A further $350 million in loans will be extended for three years, said Dubai Holding, owned by Sheikh Mohammed bin Rashid Al-Maktoum. The debt agreement marks another milestone in Dubai's effort to rebuild its credibility with investors who fled the region after state-owned conglomerate Dubai World shook markets in 2009 with plans for a $25 billion debt restructuring. Dubai World had built up the debts during the boom years before the financial crisis. It reached a final deal with creditors in 2010, extending repayment over five to eight years. Dubai International Capital gave no details on how it plans to repay the debt at maturity but the private equity firm has been selling down assets. It sold hotel operator Ishraq Dubai to diversified firm Almulla Group in October last year.
