Dubai World deal ‘agreeable’: Al Suwaidi

DUBAI — UAE Central Bank Governor Sultan bin Nasser Al Suwaidi termed Dubai World’s debt proposal to core lenders “agreeable,” and also said credit growth is reasonable.

By Abdul Basit

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Published: Wed 26 May 2010, 11:21 PM

Last updated: Mon 6 Apr 2015, 11:12 AM

“I think banks are finding the proposal very much agreeable,” Al Suwaidi told reporters on the sidelines of the Middle East, North Africa and South Asia, or MENASA, Forum at the Dubai International Financial Centre late on Monday.

Last week the state-owned Dubai World said it reached an agreement with its major lenders to restructure $23.5 billion of loans. Dubai World will pay $4.4 billion of the loans in five years and another $10 billion over eight years.

The holding company offered banks various combinations of interest rates and principal repayment options depending on whether they lent in dollars or dirhams.

“At this point in time the rate is much better than one per cent, Al Suwaidi said, adding: “In the final outcome it will be higher than one per cent.”

Regarding provisioning of the company’s debt by banks, he said, “if it is required according to international accounting standards and international reporting standards we will do that.”

The governor said he is not worried about slow credit growth. “Our opinion is that, under the circumstances, it is growing at a reasonable rate,” he said.

Earlier, addressing the MENASA Forum, Suwaidi proposed multinational banking laws in the MENASA region and said these laws may be beneficial for these countries.

“Implementation of similar banking laws, using similar regulations, and adopting similar processes in banking supervision in the MENASA Area countries… will go a long way in providing banking sectors with a strong basis for building on successes,” he said.

“It will make regulators realise the importance of regional cooperation and coordination, which hopefully will lead, at one stage in the future, to enabling cross-border branching of banks and other financial institutions.”

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