DEBT-LADEN Dubai World will present plans to restructure its $26bn (£17.3bn)debt pile to creditors this week, with details emerging as soon as today, sources familiar with the talks said yesterday.
The conglomerate, which has been locked in talks with its creditors, will discuss how it plans to repay its commitments with an informal bank panel, which represents 97 creditors to the state-owned conglomerate, in Dubai .
“People will be looking for anything not already priced in (the market) such as a government guarantee,” said Robert McKinnon, ASAS Capital’s chief investment officer.
The debt is linked mainly to Dubai World’s property units, Nakheel and Limitless World. The company ringfenced other key assets, such as ports operator DP World, from the restructuring.
A final proposal on the debt could involve tranches with different repayment profiles, one with a repayment over three to five years with the principal discounted, and another with repayment over seven to nine years with no discount.
The eventual proposal will centre on the extension of maturities with low or zero interest, and the option of an early exit at a discount or eventual repayment over a longer period of time.
A Dubai government spokeswoman said yesterday that 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 $26bn in debt linked to its flagship conglomerate Dubai World, sending shockwaves through markets.
City A.M. Reporter