Dubai close to debt deal
By Adam Schreck |
May 21, 2010, Friday
|
Print Edition
Print Edition
DUBAI World has reached a deal "in principle" with a majority of its creditors on the company's US$23.5 billion restructuring plan, it said yesterday.
The state company at the center of Dubai's immense debt said a committee representing about 60 percent of its lenders had agreed in broad terms to the proposal. It still needs to win the backing of its other financial creditors.
Aidan Birkett, Dubai World's chief restructuring officer, said the company was happy to win what he said was the committee's "unanimous support in principle" for the plan.
"This is an important milestone and reflects our efforts to achieve the best possible solution for all stakeholders," he said.
"The proposal puts the company on a sound financial footing and reflects the continued support of the government of Dubai and its lenders."
Dubai's government outlined its restructuring plan in late March, but the deal still needed approval from a broad array of international and local banks owed money by the company. Among the committee's members are HSBC Holdings, Royal Bank of Scotland Group and Standard Chartered.
If the restructuring plan goes ahead, Dubai World said it will carry about US$14.4 billion in bank debt. Some US$4.4 billion is due to be repaid within five years. The remaining US$10 billion will have an eight-year repayment period.
As part of the proposal outlined in March, Dubai's government - full owner of the conglomerate - agreed to offer as equity an US$8.9 billion claim in the company, while also pumping in up to US$1.5 billion in new funds.
The state company at the center of Dubai's immense debt said a committee representing about 60 percent of its lenders had agreed in broad terms to the proposal. It still needs to win the backing of its other financial creditors.
Aidan Birkett, Dubai World's chief restructuring officer, said the company was happy to win what he said was the committee's "unanimous support in principle" for the plan.
"This is an important milestone and reflects our efforts to achieve the best possible solution for all stakeholders," he said.
"The proposal puts the company on a sound financial footing and reflects the continued support of the government of Dubai and its lenders."
Dubai's government outlined its restructuring plan in late March, but the deal still needed approval from a broad array of international and local banks owed money by the company. Among the committee's members are HSBC Holdings, Royal Bank of Scotland Group and Standard Chartered.
If the restructuring plan goes ahead, Dubai World said it will carry about US$14.4 billion in bank debt. Some US$4.4 billion is due to be repaid within five years. The remaining US$10 billion will have an eight-year repayment period.
As part of the proposal outlined in March, Dubai's government - full owner of the conglomerate - agreed to offer as equity an US$8.9 billion claim in the company, while also pumping in up to US$1.5 billion in new funds.
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