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Dubai set for crunch talks

City A.M. Reporter
Bankers yesterday gathered in Dubai to hammer out a $26bn debt plan with state-owned Dubai World as a repayment deadline loomed, adding to pressure on the glitzy emirate to settle the conglomerate’s debt.

Core creditors representing 97 banks met to finalise months of talks on how Dubai World can restructure the debt, about a quarter of Dubai’s estimated total debt of $101bn.

Former minister Shriti Vadera is also understood to have been in Dubai for weeks, despatched quietly by the UK government after British banks, which form the bulk of the informal creditor committee, raised concerns about the process in London. She is thought to have played a key role in hammering out the debt proposal.

Markets anticipated a deal favourable to lenders, with the cost of insuring Dubai sovereign debt falling and bond prices rising for Dubai World unit Nakheel, the property firm that built a giant island replica of the Earth. Dubai is expected to lean heavily on its oil-exporting neighbour Abu Dhabi, the leading member of the seven-member United Arab Emirates.