Dubai World debt deal ready

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Dubai World debt deal ready

State-owned holding company Dubai World on Thursday announced it had reached an agreement in principle with a majority of its bank lenders to restructure $23.5 billion in loans.

By Abdul Basit

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Published: Fri 21 May 2010, 12:52 AM

Last updated: Mon 6 Apr 2015, 3:43 PM

The holding company has offered various options to its core lenders, who hold around 60 per cent of the exposure, among them the offer to pay$4.4 billion of the debt in five years and another $10 billion in eight years.

“We have received unanimous support in principle of the CoCom [Coordinating Committee] on the headline economic terms to our restructuring proposal,” Dubai World Chief Restructuring Officer Aidan Birkett said in a statement.

“The proposal puts the company on a sound financial footing and reflects the continued support of the Government of Dubai and its lenders,” Birkett said. “It offers the company the ability to maximise the value of its assets over the medium to long term.”

Shaikh Ahmad bin Saeed Al Maktoum, Chairman of the Dubai Supreme Fiscal Committee, said, “The Government of Dubai welcomes this important milestone, which is the result of considerable efforts from a large number of stakeholders, who all share a common interest in Dubai’s future.”

The deal is broadly in line with proposals made on March 24, in which the government agreed to provide Dubai World with $1.5 billion to support its business plan and convert $8.9 billion in debt to equity.

“Since Dubai World presented its restructuring proposal on March 24, 2010, the company and the CoCom have been engaged in constructive discussions,” the statement said. “Following these discussions, the proposal has been refined to provide options that better accommodate the needs of our large and diverse lending group.”

Dubai World proposed various interest rates and repayment options to banks, depending on whether they lent in dirhams or dollars. The restructuring proposal requires the agreement of the rest of Dubai World’s financial creditors, according to the statement.

The proposal was welcomed by UAE bourses as the Dubai Financial Market rose for a third time this week and Abu Dhabi stocks also advanced.

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