Creditors seek to sell off Dubai World loans

BANK creditors to Dubai World are trying to offload their loans ahead of an expected restructuring of the conglomerate’s $22bn (£13.5bn) debt.

It is thought that some of the smaller international banks are keen to reduce their exposure to the debt-laden company quickly.

Last week a seller was seeking to offload about $100m of loans, which would be the first large trade in the $5.5bn loan facility at Dubai World’s parent. Of this, $2.1bn is due to be repaid in June.

The debt could be sold at 70 per cent of face value, according to investors and debt traders.

Creditors, led by banks including HSBC and RBS, met last month to hear Dubai World set out plans for its restructuring. Neighbouring emirate Abu Dhabi stepped in and bailed out Dubai World’s property development arm Nakheel with a $10bn loan, preventing a default on its $4.1bn sukuk, or Islamic bond, which fell due in mid-December.

Dubai World is trying to keep its creditors at bay with a six-month standstill agreement on its $22bn debt. The government-owned company shocked the financial world in late November, saying it could not meet debt obligations.