Dubai World to meet creditor panel on debt crisis

DUBAI - Dubai World will meet its main creditors next week to discuss a request to delay payment on $26 billion in debt.

Dubai’s problems had raised fears of a renewed global crisis, but there was little evidence of concern on the streets, where thousands of balloons in the black, white, green and red of the United Arab Emirates flag were released to mark the federation’s national day.

Next week’s meeting would be Dubai World’s first formal talks with key lenders since the conglomerate that spearheaded the emirate’s rapid growth disclosed its debt woes on Nov 25.

An Abu Dhabi bank executive, who asked not to be named, said London-listed Standard Chartered, HSBC, Lloyds and Royal Bank of Scotland, along with local lenders Emirates NBD and Abu Dhabi Commercial Bank were on the creditors panel.

The banks did not immediately confirm their participation on the committee but an Asian-based banking analyst said the six banks were likely to be among those with greatest exposure to Dubai World, which ran up its debts during a property boom that turned to bust with the global financial crisis last year.

A source at a Dubai-based bank confirmed the makeup of the panel.

Dubai World has asked creditors for a six-month standstill on the debt of its property subsidiaries Limtless and Nakheel, developer of three palm-shaped islands that once lured wealthy expatriates and even celebrities.

The most urgent question is the fate of Nakheel’s $3.52 billion Islamic bond, which matures on Dec. 14. British law firm Ashurst said it was named legal adviser to Nakheel bondholders who account for 25 percent of the bond.

Dubai said the government would not guarantee the debts of Dubai World, whose overall liabilities total almost $60 billion, including those of units not part of the restructuring.

UAE markets, battered in the last two days, were shut for the holiday, but Qatar’s bourse surged nearly five percent after plunging more than eight percent on Tuesday.

UAE officials have blamed foreign media for exaggerating the crisis, ignored during national day festivitives. Black-clad women waved at a flag-draped flotilla in Dubai Creek, the waterway on which Dubai first built its reputation as a regional trading centre.