Dubai Holding subsidiary, Dubai Holding Commercial Operations Group (DHCOG) has finally released its delayed financial results for 2009. It is grim reading.

The firm made a loss of $6.4bn, largely due to the impact of collapsing property values, which caused a drop in the value of the company’s investments of $16.4bn. But its operating loss was still $272m even without factoring in the impairments. Revenue fell to $2.6bn from $3.6bn, and the firms estimates it may have to pay $1bn as a result of contractor claims for cancelled and delayed projects.

The company also breached loan covenants on a $1bn loan. Fortunately for Dubai Holding, its banks did not take remedial action. Talks are under way to rollover the loan, the largest of which is due to be repaid in July. But the goodwill of Dubai’s banking community may be stretched over the coming months.

In addition to the Dubai Holding debt issues, state-owned Dubai World’s unit, Drydocks World, needs to restructure a $1.7bn loan, and Dubai International Capital, another subsidiary of Dubai Holding, is trying to extend repayment on its $1.25bn loan due in July.

Clearly the work on unwinding the emirate’s $109bn debt pile built up during a decade of easy credit has a long way to go, despite the progress made on restructuring debt on Dubai World and property developer Nakheel.

But as the problem mounts, the issue facing banks is when they will get repaid, and how.

Much will depend on the success of selling off the overpriced assets bought by various investment funds in the final years of the credit boom, and a recovery in the real estate sector.

That is far from assured in the short-term. Oversupply will continue to hang over prices, and the reluctance of banks to give credit to buyers will also weigh on new sales. DHCOG said it expects the sector to remain challenging in 2010 and into 2011. Bankers will be hoping the recovery starts sooner than that if all this rescheduled debt is to be repaid.