Dubai World will present plans to restructure its $26 billion debt pile to creditors this week, with details emerging as soon as tomorrow, sources familiar with the discussions said today.
The plan on how the Gulf Arab emirate plans to repay its commitments will be discussed with an informal committee, which represents 97 creditors to the state-owned conglomerate, in Dubai, said the sources, who spoke on condition of anonymity.
State-owned Dubai World, which has ringfenced key assets such as ports operator DP World from the restructuring, has been in talks with a panel made up of seven banks.
A final proposal on the debt could involve tranches with different repayment profiles, one with repayment over three to five years with the principal discounted, and one with repayment over seven to nine years with no discount.
Support from wealthy neighbour Abu Dhabi has been seen as a key component of any Dubai offer and would likely determine how good or bad a final proposal would be.
A Dubai government spokeswoman today said meetings with the core creditor committee, known as CoCom, were part of "an ongoing dialogue related to the restructuring process".
The spokeswoman said Dubai remains on track to present a formal proposal to creditors in March. The panel includes Standard Chartered, HSBC, Lloyds, Royal Bank of Scotland, Emirates NBD and Abu Dhabi Commercial Bank, which, combined, are believed to have two-thirds of the total exposure.
Dubai said in November it would ask creditors to delay repayment on $26 billion in debt linked to its flagship conglomerate Dubai World, sending shockwaves through markets.
A last-minute lifeline from Abu Dhabi helped the glitzy Gulf Arab emirate, known for its tax-free earnings and easygoing lifestyle, avert default on a $4.1 billion Islamic bond linked to Nakheel.
Reuters