Al Habtoor Group Divests All Lebanese Assets Amidst Prolonged Instability and Investment Dispute

Dubai-based Al Habtoor Group has announced that its board of directors has approved the complete sale of its assets and investments in Lebanon, following the cessation of its operations in the country. The conglomerate, which held hotels, commercial, and residential properties in Lebanon, had previously stated in January its intention to cease operations and terminate employees due to "prolonged instability" and an investment dispute. At that time, the group indicated that its investments across hospitality, retail, leisure, real estate, and banking-related activities in Lebanon had resulted in losses exceeding $1.7 billion.

In a statement released on Monday, Al Habtoor Group explained that after careful consideration, the board concluded that divesting all Lebanese assets is the most appropriate course of action. This decision aligns with the group's commitment to responsible investment management, capital allocation, and the protection of its interests. The company plans to execute this divestment through a structured and commercially driven process, with each asset to be evaluated individually and transactions pursued based on market conditions and valuations.

Further to these developments, Al Habtoor Group appointed the law firm White & Case in February to initiate arbitration proceedings against Lebanon in the US. This legal action is grounded in the dispute resolution mechanisms stipulated by the UAE-Lebanon bilateral investment treaty. The group first established its presence in Lebanon in 2001 with the opening of its initial hotel and has since made substantial investments, maintaining its commitment through periods of economic and political uncertainty.

The board's latest decision signifies a strategic shift, with the group intending to concentrate its resources on markets that offer greater long-term stability, investment certainty, and sustainable growth opportunities. Al Habtoor Group stated that further details regarding the divestment process will be announced in due course.

Lebanon has been grappling with a severe economic crisis since 2019, described by the World Bank as one of the worst in modern history, with projections of a 6.4% economic contraction in 2026. The nation, heavily dependent on imports, is also contending with the repercussions of regional conflicts, including disruptions to shipping and energy supplies. The International Monetary Fund has indicated ongoing discussions with Lebanon as part of broader efforts to support vulnerable countries in the Middle East and North Africa.