Representatives of Dubai World and at least 90 of its creditors have begun talks on what to do about the conglomerate's 22 billion dollars of outstanding debt, news of which spread panic across markets last month.
AFP - Dubai's heavily-indebted group, Dubai World, began talks Monday with its lenders over its request to restructure 22 billion dollars in debt but has made no specific proposals, a company spokesman said.
"Representatives of Dubai World took part in the meeting with creditors today (Monday)," the spokesman told AFP, declining to be named.
But "there were no specific proposals made" by the government-owned company, he said.
Representatives of at least 90 creditors were expected to take part in the Dubai meeting, with the first aim being to name a coordinating committee to represent the creditors, the National newspaper said earlier.
The committee is likely to include four British banks -- HSBC, Lloyds, RBS and Standard Chartered, which are believed to have a Dubai World debt exposure exceeding five billion dollars, the paper said.
Regional lenders are led by Abu Dhabi Commercial Bank and Dubai's Emirates NBD bank.
Dubai World was represented by its chief restructuring officer, Aidan Birkett, of Deloitte global accounting firm, who was recently hired by the Dubai government to oversee the revamping of the group, the spokesman said.
The meeting is believed to be just the beginning of long negotiations to sort the obligations of a number of Dubai World subsidiaries which are up for restructuring.
Topping the list is the group's giant property developer Nakheel, which narrowly escaped being pushed to default on debt after a last-minute Dubai announcement last week that Nakheel's maturing Islamic bonds of 4.1 billion dollars would be paid on time.
The payment was covered thanks to a 10-billion-dollar lifeline extended by neighbouring deep-pocketed Abu Dhabi, which brought to 25 billion dollars the total aid supplied by Abu Dhabi and the UAE's central bank to sort the debt problems of Dubai corporates.
Dubai made it clear that remaining funds would cover Dubai World's interest payments and arrears to contractors through April 2010 on the condition that the group reaches a debt restructuring settlement with its lenders.
The emirate had rocked global markets last month when it requested a six-month freeze on debt payments by the group in order to restructure it.
Top Dubai financial officials reportedly told banking leaders in London last week that Dubai World could still pay the bank loans of its troubled subsidiaries in full over the medium term.
Debts owed to banks are believed to amount to over a half of the obligations of the concerned units.
The total debt of Dubai is estimated between 80 and 100 billion dollars. Dubai World's debt was 59 billion dollars before the government paid Nakheel's 4.1 billion dollars bonds.
Dubai's economy grew at a rapid rate over the past years, on the back of a real estate boom, but it was hard hit by the global economic crisis which caused a shortage in available finance for the emirate's ambitious projects.
Date created : 2009-12-21