Loading...
See More

Dubai World reaches $24.9bn debt deal

Sep 10 2010 13:36 Reuters

Related Articles

Dubai: Tax Haven or Tax Trap?

Govt support for Dubai World?

Dubai opens world's tallest tower

Dubai could repay loans in full

Dubai: Abu Dhabi to the rescue

Dubai World to get $9.5bn boost

 

Dubai -  State-owned conglomerate Dubai World on Friday reached a formal deal to restructure about $24.9 billion of liabilities, partly easing recently heightened concerns over the Gulf emirate's debt woes.

While Dubai World's agreement with most of its creditors is seen as a positive step for Dubai, the announcement comes just days after a unit of Dubai Holding, the conglomerate owned by Dubai's ruler, said it will delay repayment on a $555m loan, the second time it has failed to meet a repayment deadline.

"Most players had expected this outcome and that the restructuring would be completed by October or November," said Andre Andrijanovs, credit analyst at Exotix in London.

"It is a surprise that it has happened so quickly and that an agreement was reached this week, and that be will a positive momentum for Dubai ... There are other situations though that need resolving such as Dubai Holding."

Dubai World reached an agreement with over 99% of its creditors by value to restructure around $24.9bn of liabilities, the government of Dubai said in a statement. Dubai World said in a separate statement it is well positioned to close the restructuring in "the coming weeks".

"The agreement formalises a strong consensus about a fair and balanced restructuring proposal and is a key step to putting Dubai World on a sound and stable financial footing," Sheikh Ahmad Bin Saeed Al Maktoum, chairman of the Dubai Supreme Fiscal Committee said in the statement on Friday.

The government of Dubai remains a supportive and committed shareholder, the statement added.

Dubai World's target date for completion, assuming consensual agreement reached with creditors, was October 1, a final restructuring proposal presented to creditors on July 22 and obtained by Reuters in August, showed. Concerns about the overall debt burden of Dubai's state-linked companies mounted after Dubai announced a standstill on repaying $26bn in debt as it restructured Dubai World. It unveiled a $9.5bn rescue plan for the firm in March.

"Any resolution is positive and we had news on Dubai Holding last week," said Abdul Kadir Hussain, chief executive of Mashreq Capital in Dubai.

"There is progress on all of these which will deem positive for the debt position in Dubai," he added.

FOCUS ON NAKHEEL

In Friday's statement the government said "it continues to focus on Nakheel and is pleased with the significant progress achieved by the company to date in discussions with its creditors."

Troubled Dubai property developer Nakheel, a unit of Dubai World, which overstretched itself building islands in the shape of palms and other ambitious real estate, is holding separate restructuring talks.

Under the restructuring of its parent company, the developer would be placed directly in the hands of the government.

Dubai World, plans to sell its prized assets over a period of eight years to generate as much as $19.4bn to pay off creditors, according to the restructuring proposal document obtained by Reuters.

It said in the document asset disposals over an eight-year period will help generate up to a maximum of $19.4bn, while similar sales based on current prices would be worth a maximum of $10.4 bn.

The document also showed Nakheel has $10.9bn of bank debt and will receive key assets from Dubai World after separation.

dubai
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
2 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Small Business

Retailers of any shape and size can now unlock the power of mobile transacting.
 
 

3 sports games you have to watch this weekend

Whether it’s date night or a braai with buddies, plan around these three exciting sporting games!

 
 

Men24.com

Everyday struggles of naturally skinny guys
And this year's Miss Bumbum title goes to...
How to maintain your mo, bro
Hottie of the day: Colette

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...