Standard and Poor’s ratings agency on Monday removed DIFC Investments from CreditWatch negative, but warned that it has to sell more assets to put the company on self-sustainable footing.
The outlook remains negative.
Dubai-based real estate and financial investments group DIFC Investments (DIFCI) has embarked on a $1 billion plus restructuring plan aimed at divesting its noncore investments by the end of 2011.
“We are affirming our 'B+/B' long- and short-term corporate credit ratings on DIFCI, removing them from CreditWatch negative, and assigning a negative outlook. We are lowering our assessment of the company's standalone credit profile to 'B-' from 'B+', while raising our government support assumptions to ‘moderately high’ from ‘low’,” a press statement said.
“The ratings are also based on S&P’s view of DIFCI's weak earnings and operating cash flow. The company has high levels of debt - which stood at $3.1bn on December 31, 2009, when adjusted by our measurements - and noncore investments in companies and private equity funds that generate little or no dividends”.
DIFCI's credit strengths include, in S&P’s opinion, stable cash flows from its core business of running the infrastructure of the DIFC and make a strong market position. Emirates Business
