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UPDATE 2-Dubai World revamp to save $800 mln over three yrs
* Restructuring to save $800 mln in 3 years
* Says cut 15 pct of global workforce; 25 pct in UAE
* Creates Retailcorp World to manage Nakheel malls (Adds analyst comments)
By Raissa Kasolowsky
DUBAI, Oct 15 (Reuters) - Government conglomerate Dubai World said on Thursday its restructuring was nearly complete and would help save $800 million in operating costs over the next three years.
The company also said it had reduced its global workforce by 15 percent to around 70,000. Staff in the United Arab Emirates were cut by 25 percent, largely as a result of the downturn in the region's real estate market, it said.
Dubai World hired AlixPartners, the turnaround experts advising on the General Motors [GM.UL] bankruptcy, to help restructure its business in June in order to cope with the impact of the global economic crisis.
"As a result of the overall reorganisation, the company is scheduled to benefit by more than $800 million in operating savings over the next three years," the firm said in a statement to Nasdaq Dubai.
"Each Dubai World division is now more appropriately sized for the current market," the firm said.
Analysts say the move failed to give clear signal on the group's debt repayment programme.
"This announcement is along the lines of what we've been hearing from Dubai World for a while," said Abdul Kadir Hussain, chief executive at Mashreq Capital.
"But there is still a lack of clarity on what their debt reduction plan is. Although these actions are well intentioned, they have to be more significant in terms of what Dubai World's debt restructuring strategy is."
Dubai World's property unit, Nakheel, has $3.5 billion worth of Islamic bonds which mature on Dec. 14. Questions remain about the government's plan for those bonds, although a full repayment is the most likely scenario, analysts say. [ID:nLP85703]
"I don't think this announcement will have a major effect on Dubai World and how investors look at it going forward," said Mohammed Yasin, chief executive at Shuaa Securities.
"However, it would be good to know how much the move will save in six months or one year -- how much saving does 15 percent of workforce represent now?" Yasin said.
Dubai World also said on Thursday that the management of Nakheel's shopping malls, including the Ibn Batutta Mall and DragonMart in Dubai, were moving to a separate entity, Retailcorp World.
The company said last month it had shifted hotel and property assets, as well as executives, from Nakheel to its Istithmar World unit, as part of the restructuring.
There had been speculation that Istithmar, the investment arm of the Dubai government and owner of U.S. luxury retailer Barneys New York [DBWLDB.UL], might be facing difficulties.
It hired an advisory firm in August to help it consider its options to shore up Barneys' financial position and media reported that Istithmar was freezing investments as part of a restructuring that might result in the sale of the fund or its assets. [ID:nBNG437413]
Earlier this month, a member of Dubai's ruling family said the emirate will be able to service government debt and that of state-linked firms this year [ID: nL5685030]. (Reporting by Raissa Kasolowsky; Editing by Rupert Winchester)
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