Dubai World proposes 7-year repayment scheme
By Raissa Kasolowsky |
March 18, 2010, Thursday
|
Print Edition
Print Edition
DUBAI World will offer banks a single proposal to repay in full the US$26 billion debt it is renegotiating, with interest likely linked to LIBOR, Al Arabiya reported yesterday.
Officials from Dubai and neighboring emirate Abu Dhabi have been working with restructuring experts to devise a viable debt restructuring plan acceptable to some 97 creditors to Dubai World, the state-controlled holding company.
Dubai World will propose to repay the debt over seven years, the Dubai-based broadcaster said on its Website. The proposal would cause banks to book losses this year due to the differences between the proposed rate and the rates in the original contracts, the report said.
Any interest losses should be declared in banks' financial statements this year, the broadcaster cited "informed banking sources" as saying.
Saudi-owned Al Arabiya also cited the sources as saying a problem had developed in the accounting process that could force Dubai World to review some minor technical, but "not fundamental," repayments.
Dubai shocked the market in November when it said it would ask creditors to delay repayment on US$26 billion in debt linked to Dubai World. A last-minute US$10 billion bailout from wealthier Abu Dhabi helped Dubai avert an embarrassing default.
Officials from Dubai and neighboring emirate Abu Dhabi have been working with restructuring experts to devise a viable debt restructuring plan acceptable to some 97 creditors to Dubai World, the state-controlled holding company.
Dubai World will propose to repay the debt over seven years, the Dubai-based broadcaster said on its Website. The proposal would cause banks to book losses this year due to the differences between the proposed rate and the rates in the original contracts, the report said.
Any interest losses should be declared in banks' financial statements this year, the broadcaster cited "informed banking sources" as saying.
Saudi-owned Al Arabiya also cited the sources as saying a problem had developed in the accounting process that could force Dubai World to review some minor technical, but "not fundamental," repayments.
Dubai shocked the market in November when it said it would ask creditors to delay repayment on US$26 billion in debt linked to Dubai World. A last-minute US$10 billion bailout from wealthier Abu Dhabi helped Dubai avert an embarrassing default.
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