DUBAI: A unit of Dubai World has sold its Atlantis resort, which sits on a palm tree-shaped island in the Gulf, in an asset shuffle between state entities to help the group meet huge debt repayments after a $25bn restructuring in 2011.
Investment Corp of Dubai (ICD), a holding company which controls some of the emirate’s top firms, has bought the resort from the unit, Istithmar World, for an undisclosed sum, ICD said.
ICD, which like Dubai World is state-owned, said buying the landmark hotel complex that is characterised by a giant Arabic-style arch would help the emirate’s economic development.
“Our acquisition of an asset that is a major contributor to the domestic tourist industry is in line with our overall strategy to support long-term sustainable growth for Dubai,” Khalifa Al Daboos, deputy chief executive officer of ICD, said.
A spokesman for Istithmar in Dubai declined to comment. The sale adds to a series of disposals by Dubai World, which had promised to sell non-core assets under the debt-restructuring plan drawn up when the group fell victim to a property market crash in the emirate and the after-effects of the global financial crisis.
Dubai is increasingly juggling assets between its different state firms, allowing cash to be transferred from stronger entities such as ICD to debt-laden ones like Istithmar.
Dubai World needs to repay $4.4bn in May 2015 under its restructuring terms but its plan to sell assets to meet the payment was hit by unfavourable selling conditions and the fall in valuations since the global financial crisis. Dubai World’s restructuring plan envisaged that it would raise $1.3bn-$2.3bn between 2010 and 2012, and a further $3.9bn-$5.3bn in 2013-2015 through sales of holdings such as P&O Ferries and MGM Resorts International.
However, it had to sit on its hands due to a lack of buyers and began offloading parts of its portfolio only this year.
Among the transfers between state entities, Dubai Electricity & Water Authority plans to buy Palm Utilities, a district cooling company owned by Dubai World, according to local media reports last month.
Dubai’s economy is recovering due to renewed investor optimism in its trade, tourism and real estate sectors but the emirate still faces debt repayments of about $50bn over the next three years. Reuters