Citi, Qatar bank hold up Abu Dhabi firm's $4.5 bln debt talks - sources

Reuters

* Al Jaber debt talks ongoing for nearly three years

* Citi planning to sell loan exposure at discount - source

* Conglomerate in talks with banks holding up talks - source

By Stanley Carvalho and Regan Doherty

ABU DHABI, Oct 9 (Reuters) - Citigroup Inc andInternational Bank of Qatar (IBQ) are holding up negotiations torestructure $4.5 billion in debt of Abu Dhabi conglomerate AlJaber Group, further complicating drawn-out talks, three sourcesfamiliar with the matter said.

Al Jaber is one of the most prominent private sector firmsin Abu Dhabi, which has generally suffered fewer corporateproblems than neighbouring Dubai since the financial crisis.

With operations in construction, aviation and retail, AlJaber set up a five-bank creditor committee in 2011 to negotiatea restructuring after it became difficult for the firm toservice its debt on maturity.

The two banks that are holding up talks represent only asmall portion of the creditors negotiating the debt, the sourcessaid, speaking on condition of anonymity as the matter is notpublic. Spokesmen for Al Jaber and Citigroup declined tocomment. IBQ was not available for comment.

"Everything is agreed to, except one percent of banks areholding out. Because there is no bankruptcy law in the UAE ...they don't know what to do with this one percent," a senior AbuDhabi-based banker with knowledge of the matter told Reuters.

The source added that Citigroup was planning to sell theloans in the secondary market at a discount to cut its exposure.This might not end the uncertainty over the restructuring,though, depending on the purchaser.

"We think it's a pretty solvable problem. (Al Jaber) hasgood assets and cash flow," the source said.

Another source said that Al Jaber was in close discussionswith the banks holding up the process and was optimistic of anagreement in the near future.

Like many family-owned groups in the Gulf, Al Jaber lookedto expand beyond its core business - in Al Jaber's case,construction - but was then dragged down by poor performance inthese new fields, the weight of debt raised to achieve theexpansion and a slowdown in the local construction sector.

Most of the debt restructurings negotiations in the region,have been agreed with creditors by extending maturities andoffering full repayment of the debt after a certain number ofyears, mostly through asset disposals.

Al Jaber's credit committee is chaired by National Bank ofAbu Dhabi and includes Abu Dhabi Commercial Bank, HSBC Holdings, Royal Bank of Scotland and Union National Bank.

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