Talent quest for new Dubai International Capital directors



There was a time when you couldn't keep Dubai International Capital (DIC) out of the headlines.

In the boom years, it seemed barely a week passed without a multibillion-dirham equity deal (Sony, Airbus), or the purchase of a glamorous foreign brand (Madame Tussauds), or a move into glitzy sports businesses (the ultimately fruitless pursuit of Liverpool football club).

I can think of no other private equity group that has had its name chanted by a crowd of football fans.

It's a sign of how times have changed, both in Dubai and specifically at DIC, that for more than a year now, the headlines have been rather less rapturous: debts; extensions; renegotiations and restructurings.

Like Dubai itself, DIC has spent the past 12 months getting on with the job of reconstruction. In that time it has dissolved the old board of directors, replaced a chief executive and chairman, got the agreement of most of its creditors to restructure some US$2.5 billion (Dh9.18bn) of debt, and sold down most of that sparkling global investment portfolio.

It was a comparatively low-key process with none of the big set-pieces of the Dubai World restructuring. DIC had fewer moving parts than Dubai World, and is itself just a cog, although a big one, in the wheels of the Dubai Holding conglomerate. But DIC has changed profoundly, and is set to change even more.

Perhaps most significantly, it is about to re-establish a full board of new directors. Since it was founded in 2004, DIC has always had a board to oversee the workings of the executive committee. It came as a shock to investment partners and creditors when the old board was dissolved in January last year with no replacement.

This is about to be rectified, I hear. The search is on for a handful of senior directors to form a new board. There will be representatives of the Emirati business elite, to safeguard the interests of the ultimate shareholder, Sheikh Mohammed bin Rashid, Vice-President of the UAE and Ruler of Dubai.

There will also be some top-level independent non-executive directors to represent the interest of creditors and to ensure the highest standards of corporate governance are observed.

Given the nature of DIC's business, at least one of those appointments should be an expert in asset valuation. Some interesting names are being whispered in the corridors of the Dubai International Financial Centre to fill these positions, but the final decision on appointments rests with the Dubai Supreme Fiscal Committee, and it would be counterproductive to second guess that august body.

Until the new board is announced, David Smoot, who took over as the DIC chief executive last year, will continue the negotiations with creditors. Banks representing some 67 per cent of the company's outstanding debts have agreed to the terms of a restructuring of the $2.5bn of debt over six years, with a further $500 million extended over four years.

Some progress has been made on getting the agreement of all creditors to the new terms, but it is a slow process, and no timetable has been set to reach the 100 per cent agreement level.

While these talks go on with creditors, who are said to be supportive, understanding and patient, Mr Smoot will continue to implement the business plan already agreed with the shareholders and creditors.

DIC is getting back to what it was always intended to be: a private equity investment company focused on European corporations and Middle East infrastructure.

It retains 100 per cent ownership of some major investments, including Doncasters, the UK engineering firm, and Travelodge, the British budget hotels business. It has been forced to reduce interests elsewhere, but still has majority control of the German alumina products manufacturer Almatis, and a very small interest in the UK's Alliance Medical.

Even with the cash-squeeze, DIC has invested $300m in these assets in the past year.

Outside Europe, DIC's main direct interests are in manufacturing, hotels and retail in the UAE, and in infrastructure across the Mena region via investment funds. Mainly in Jordan and Egypt, these investments are vulnerable to, but so far unaffected by, the political turmoil in the region.

There has been speculation that substantial parts of this portfolio is up for grabs, even subject to a fire-sale to satisfy out-of-pocket investors and creditors. The feeling within the company is entirely the opposite: it is under no pressure from creditors, investors or the shareholders to get rid of any assets at unrealistic prices.

DIC expects values to rise as economic recovery takes off, and positions to be realised at appropriate valuations when opportunities arise, especially in parts of the portfolio outside Europe.

But that is the normal business of a private equity group, which DIC is once again in the process of becoming, rather than a collector of global investment baubles.

The specs
Engine: 4.0-litre flat-six
Power: 510hp at 9,000rpm
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
Price: From Dh801,800
NO OTHER LAND

Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal

Stars: Basel Adra, Yuval Abraham

Rating: 3.5/5

MATCH INFO

Rugby World Cup (all times UAE)

Final: England v South Africa, Saturday, 1pm

The biog

From: Upper Egypt

Age: 78

Family: a daughter in Egypt; a son in Dubai and his wife, Nabila

Favourite Abu Dhabi activity: walking near to Emirates Palace

Favourite building in Abu Dhabi: Emirates Palace

Singham Again

Director: Rohit Shetty

Stars: Ajay Devgn, Kareena Kapoor Khan, Ranveer Singh, Akshay Kumar, Tiger Shroff, Deepika Padukone

Rating: 3/5

Specs

Engine: 51.5kW electric motor

Range: 400km

Power: 134bhp

Torque: 175Nm

Price: From Dh98,800

Available: Now

Specs

Engine: Dual-motor all-wheel-drive electric

Range: Up to 610km

Power: 905hp

Torque: 985Nm

Price: From Dh439,000

Available: Now

Election pledges on migration

CDU: "Now is the time to control the German borders and enforce strict border rejections" 

SPD: "Border closures and blanket rejections at internal borders contradict the spirit of a common area of freedom" 

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Ain Dubai in numbers

126: The length in metres of the legs supporting the structure

1 football pitch: The length of each permanent spoke is longer than a professional soccer pitch

16 A380 Airbuses: The equivalent weight of the wheel rim.

9,000 tonnes: The amount of steel used to construct the project.

5 tonnes: The weight of each permanent spoke that is holding the wheel rim in place

192: The amount of cable wires used to create the wheel. They measure a distance of 2,4000km in total, the equivalent of the distance between Dubai and Cairo.

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Washmen Profile

Date Started: May 2015

Founders: Rami Shaar and Jad Halaoui

Based: Dubai, UAE

Sector: Laundry

Employees: 170

Funding: about $8m

Funders: Addventure, B&Y Partners, Clara Ventures, Cedar Mundi Partners, Henkel Ventures

In numbers: PKK’s money network in Europe

Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010

Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille

Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm

Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year

Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”

Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners

TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013