Dubai International Capital, the troubled international investment arm of the Dubai government, is struggling to meet loan repayments and could be forced to wind itself up.
According to the Sunday Times, DIC – which has debts of $2.5bn (€1.9bn) – has asked creditors to approve a three-month extension on a $1.2bn loan that is due this month.
Its lenders, which include HSBC, are believed to be keen for the fund to sell its assets to raise the money. The banks have appointed Deloitte to advise them on their options.
DIC's portfolio includes high-profile assets such as hotel chain Travelodge and alumina products company Almatis. DIC was set up in 2005, as a result of which much of its portfolio was acquired at the very top of the market. The firm was forced to inject fresh capital into Travelodge and component manufacturer Doncasters, among others.
The Dubai government is unlikely to bail out DIC, as it is facing its own debt crisis.