Al Habtoor board approves full exit from Lebanon after $1.7bn losses

Key Points

1. Al Habtoor Group's board approved selling all its Lebanese assets and investments following the shutdown of operations.
2. The Dubai conglomerate quit Lebanon in January, citing prolonged instability and reporting losses above $1.7 billion.
3. The exit marks one of the largest Gulf corporate withdrawals from a Lebanese economy contracting again in 2026.

The latest:

The board of Al Habtoor Group has approved the complete divestment of the Dubai conglomerate’s assets and investments in Lebanon, nearly a year after it shut down its operations there. The group said on Monday that full divestment was the most appropriate course of action, consistent with responsible investment management, capital allocation and the protection of its interests. Further details will be announced later.

Details:

• The portfolio: The group holds hotels, commercial and residential properties in Lebanon, with investments spanning hospitality, retail, leisure, real estate and banking-related activities. It said its presence began with its first hotel in 2001 and that it remained committed through successive periods of economic and political uncertainty.
• The losses: Al Habtoor Group said in January that it was ceasing all operations in Lebanon and terminating its employees there, citing prolonged instability and an investment dispute. It put its losses in the country at more than $1.7 billion at the time.
• The arbitration: In February the group said it had appointed law firm White & Case to begin arbitration proceedings against Lebanon in the United States, resting the case on dispute resolution mechanisms under the UAE-Lebanon bilateral investment treaty. It has not said whether divestment alters that track.
• How it sells: The group said it intends to carry out the divestment through a structured and commercially driven process, with each asset evaluated on its individual merits and transactions pursued in line with appropriate market conditions and valuations. No timeline, buyers or asking prices were disclosed.
• The strategy: The board described the decision as a considered shift in investment strategy, saying it plans to concentrate resources on markets offering greater long-term stability, investment certainty and sustainable growth. The statement did not name the markets the group intends to redirect capital toward.
• The economy: Lebanon has been mired in an economic crisis since 2019 that the World Bank ranks among the worst in modern history. The lender expects the economy to contract by 6.4 per cent in 2026, a second decade of contraction with no sign of a recovery turn.
• The war fallout: Lebanon, heavily reliant on imports, is also absorbing the consequences of the Iran war, leaving it more exposed to shocks such as disruption to shipping routes and energy supplies, and compounding pressure on an economy already dependent on external financing.
• The IMF track: The International Monetary Fund said last month it was advancing discussions with Lebanon as part of broader efforts to support vulnerable countries in the Middle East and North Africa. No programme terms or timetable were set out.
• The founder: Emirati businessman Khalaf Al Habtoor has previously spoken about safety fears relating to Lebanon after receiving a death threat, part of the backdrop to the group’s deteriorating relationship with the country.

Background:

Al Habtoor entered Lebanon in 2001 and built one of the largest Gulf private portfolios in the country. It stayed through the 2019 financial collapse, the currency’s destruction and the banking sector’s freeze before announcing its withdrawal this January.

Between the lines:

The sequence matters: ceasing operations in January, filing for treaty arbitration in February, then approving full divestment. Selling assets while pursuing a claim against the state under the UAE-Lebanon treaty sets a valuation benchmark that could shape what the group argues it lost. For Beirut, a Gulf investor exiting entirely while IMF discussions are still described as advancing is a difficult signal to carry into those talks.

What’s next

Watch for the group’s promised details on the divestment process, any named buyers or asset valuations, progress in the US arbitration against Lebanon, and whether IMF discussions with Beirut move toward a defined programme.