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Dubai offer not enough

DUBAI World, which is in talks to restructure $26bn (£16bn) in debt, is offering lenders an additional one per cent in interest upon maturity of new debt, but the deal is unlikely to satisfy banks, analysts said yesterday.

The state-owned conglomerate’s offer is for a one per cent interest rate and one per cent payment-in-kind, a source familiar with the matter said, an upgrade from an opening one percent interest rate offer which was rejected as being too low.

A Dubai government spokeswoman said there was no change to the initial terms, which called for a cash interest payment as well as a payment-in-kind but did not outline the interest rates offered.

“The government has not presented a revised offer or improved terms,” she said.