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DUBAI — An investment company controlled by Dubai's crown prince is reportedly in talks with lenders to rework terms on about $1.6 billion in debt.
Abu Dhabi government-owned newspaper The National reported on the talks by Zabeel Investments in its Wednesday edition, citing unnamed financial sources in Dubai.
Difficulties at Zabeel could compound Dubai's fiscal challenges as it works to sort out billions of dollars in state-linked debt.
Zabeel has missed some loan repayments, and is considering seeking new terms on its debts as well as outside cash injections and possible asset sales, according to the paper.
Zabeel officials couldn't be reached. Dubai's government media office was unable to immediately comment.
Separately on Wednesday, Dubai said it plans to run a budget deficit of 3.78 billion dirhams, or $1.05 billion, in 2011.
That is a narrower funding gap than the $1.6 billion shortfall the emirate forecast for 2010. It would be the third straight year of deficits for the city-state, which faced a shortfall for the first time in memory in 2009.
