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Dubai Holding Consolidates to Offset Crisis
DUBAI - Dubai Holding said on Sunday it will reorganise in the latest attempt by big Gulf businesses to cope with the impact of the economic crisis.
The state-owned firm said it will condense seven of its units into four — property, business parks, hospitality and investments. “The realities of the global economic climate have made it necessary for us to look at our portfolio in a different way,” Chief Executive Ahmad bin Byat said in a statement.
A spokesperson for the company declined to specify whether the restructuring would involve job cuts.
The global financial crisis forced an end to Dubai’s real estate boom, prompting developers to cancel scores of projects and leading to thousands of job cuts.
The restructuring comes at a time when the emirate is trying to reanimate its economy, as the global economic downturn curtailed access to cheap finance while lower oil prices cut revenues.
The Dubai government introduced a number of measures, including a $20 billion bond programme, whose proceeds are aimed at bolstering entities such as Dubai Holding.
Among Dubai Holdings’ firms are Tecom Investments, Tatweer, a leisure and theme park developer, and investment firm Dubai International Capital.
Three of Dubai Holding’s real estate units are in talks to merge with the emirate’s leading developer Emaar Properties. Dubai Holding said in February it would merge back-office operations at Dubai Properties, Sama Dubai and Mizin to cut costs.
Dubai Holding was created in 2004, consolidating a number of companies that the emirate used to spearhead some of its most ambitious infrastructure and investment projects. Dubai Holding’s Jumeirah Group runs some of the emirate’s most exclusive hotels, including the Burj Al Arab. It also manages luxury hotels in London and New York.
“Bringing together the companies in our portfolio into these four verticals has allowed us to build on our existing strengths by aligning complementary businesses. By building on the synergies within our portfolio our businesses are able to take advantage of the diverse expertise within Dubai Holding like never before,” Ahmad bin Byat said.
“We have a strong and diversified asset base which includes our employees, our projects and our international partners. Restructuring our portfolio in this manner is going to positively affect our business operations and enhance our customer service. In this changing environment we have adapted and therefore our portfolio stands strong and is ready to take advantage of new opportunities,” Bin Byat added.
Marios Maratheftis, Chief Economist at Standard Chartered Bank, said: “Consolidation is something we expect to continue as growth rates are not reaching the levels of previous years, so consolidation is justified.”
business@khaleejtimes.com
With inputs from Agencies
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