Dubai World gets lenders' nod
By Adam Schreck |
October 28, 2010, Thursday
|
Print Edition
Print Edition
DUBAI World has secured full creditor support for its US$24.9 billion restructuring plan, a spokesman for the indebted state conglomerate said yesterday.
The deal closes one chapter in Dubai's efforts to get its financial house in order nearly a year after it shocked global markets by acknowledging it couldn't repay all its bills.
State-owned Dubai World announced last month that nearly all its creditors had signed on to the debt restructuring plan, which extends the amount of time the firm has to repay lenders. The lack of total agreement could have drawn it into protracted and potentially costly legal wrangling.
Dubai World confirmed it had all lenders on board but gave no details.
"We've reached a 100 percent agreement with creditors," a spokesman said, speaking on standing company rules of anonymity.
Dubai World gained full support after a New York-based debt firm, Aurelius Capital Management, that had been holding out on the deal sold a US$5 million sliver of debt to Deutsche Bank, according to a report in the Financial Times yesterday.
Dubai worked for months to convince more than 70 lenders to sign on to its restructuring plan. The deal offers creditors full repayment on the principal of their outstanding loans over a five to eight year period. Several banks balked at the interest rates being offered as too low.
A group of seven lenders owed the majority of the debt - Bank of Tokyo-Mitsubishi UFJ, HSBC Holdings PLC, Lloyds Banking Group PLC, Royal Bank of Scotland Group PLC and Standard Chartered PLC, and local banks Emirates NBD and Abu Dhabi Commercial Bank - agreed to the proposal in May. Convincing smaller lenders took longer.
The company's sprawling business interests range from seaports and hotels to luxury retailer Barneys New York and a stake in the CityCenter complex on the Las Vegas Strip.
The deal closes one chapter in Dubai's efforts to get its financial house in order nearly a year after it shocked global markets by acknowledging it couldn't repay all its bills.
State-owned Dubai World announced last month that nearly all its creditors had signed on to the debt restructuring plan, which extends the amount of time the firm has to repay lenders. The lack of total agreement could have drawn it into protracted and potentially costly legal wrangling.
Dubai World confirmed it had all lenders on board but gave no details.
"We've reached a 100 percent agreement with creditors," a spokesman said, speaking on standing company rules of anonymity.
Dubai World gained full support after a New York-based debt firm, Aurelius Capital Management, that had been holding out on the deal sold a US$5 million sliver of debt to Deutsche Bank, according to a report in the Financial Times yesterday.
Dubai worked for months to convince more than 70 lenders to sign on to its restructuring plan. The deal offers creditors full repayment on the principal of their outstanding loans over a five to eight year period. Several banks balked at the interest rates being offered as too low.
A group of seven lenders owed the majority of the debt - Bank of Tokyo-Mitsubishi UFJ, HSBC Holdings PLC, Lloyds Banking Group PLC, Royal Bank of Scotland Group PLC and Standard Chartered PLC, and local banks Emirates NBD and Abu Dhabi Commercial Bank - agreed to the proposal in May. Convincing smaller lenders took longer.
The company's sprawling business interests range from seaports and hotels to luxury retailer Barneys New York and a stake in the CityCenter complex on the Las Vegas Strip.
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