Dubai's main holding company is moving three executives from its struggling property division to the investment fund that owns retailer Barneys New York and part of the performance troupe Cirque Du Soleil, the state-owned Dubai Word announced Thursday.
Dubai World, under increasing scrutiny over its nearly $60 billion debt load, said it is also transferring some of its international hotels and real estate projects to the Istithmar World fund from Nakheel, the developer best known for building the city's palm-shaped islands.
Dubai World described the moves as ``part of an ongoing organisational operational restructuring process within the group.'' A spokeswoman could not be reached for further comment. Andy Watson was named chief investment officer at Istithmar, and Binod Narasimhan becomes chief financial at the fund. Sandesh Pandhare will be managing director of private equity. The shake-up comes amid ongoing questions about the financial health of Istithmar and Nakheel, which has $3.5 billion in debt coming due this year.
The company said Joe Sita, the head of Nakheel's hotel division, has left the firm. His departure comes after Istithmar announced two of its top investment executives were leaving last week. Dubai World did not say which hotels would be transferred to Istithmar, though they are likely to include properties such as New York's Mandarin Oriental and the Fontainebleau in Miami Beach.
Earlier this week, Dubai World's DP World port division said its parent had dropped out of talks to sell a piece of the cargo handler to a regional private equity firm. Such a deal could have given Dubai World additional cash as it struggles to pay back debt racked up during the boom years.
Lenders are keeping a close eye on whether Nakheel can repay its $3.5 billion Islamic bond package as a signal of Dubai's creditworthiness. Refinancing the Nakheel debt, and to a lesser extent $1 billion in sovereign debt due in November, "are seen as the real test of Dubai's ability and perhaps willingness to repay," Deutsche Bank economist Caroline Grady said in a recent report. The emirate, one of seven sheikdoms that make up the United Arab Emirates, accepted a $10 billion federal loan package earlier this year and is expected to tap into another $10 billion before the end of the year.
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