Text size:

  • Small
  • Normal
  • Large

Settlement of Dubai World debts drawing closer

The indebted conglomerate draws closer to proposing a deal with its creditors to restructure US$26 billion of debt.

Sheikh Ahmed bin Saeed Al Maktoum, the chairman of Dubai's Supreme Fiscal Committee, said yesterday that the Emirate's government is "always behind Dubai World" as the indebted conglomerate draws closer to proposing a deal with its creditors to restructure US$26 billion (Dh95.49bn) of debt. Sheikh Ahmed, speaking in New Delhi, said that Dubai World was seeking to separate "good" businesses from underperforming assets as part of its restructuring plan.

"What we try to do is trying to separate the bad business from the good business. There's a lot of good business like the port business, free zone, dry dock," he said. Dubai World has isolated its Nakheel and Limitless property units from the rest of the group as part of the plan to restructure its debt. The first formal proposals are expected to be put to creditors within a week, according to people close to the negotiations.

Nakheel and Limitless used loans to finance property projects such as the palm tree-shaped islands off the emirate's coast, which they struggled to refinance amid the credit crisis. Dubai World said in November it would seek to delay repaying all loans until May, sparking a slump in developing-nation stocks and doubling the cost to protect against a default by Dubai. The emirate's benchmark Dubai Financial Market General Index, down 19.6 per cent since the November announcement, rose 1.5 per cent to 1,683.89 on Thursday. Credit default swaps linked to Dubai declined by nine basis points to 471.3 basis points, prices provided by CMA DataVision show. And Nakheel's 2.75 per cent $750 million sukuk due in January gained 0.12 cent to 61.62 cents on the dollar yesterday, according to Citigroup prices.

Dubai World will ask banks for permission to delay loan repayments when it presents a plan this month, according to three bankers familiar with the negotiations. The company will present a restructuring proposal to its creditors after its advisers complete valuing the company's assets. The company may propose to its creditors other than the Nakheel holders a cut of 20 per cent in face value, a 10-year extension on maturities and a government repayment guarantee, JPMorgan Chase said in a research note sent to investors last Monday. Nakheel has two outstanding Islamic bonds, a Dh3.6bn floating-rate note due May 13 and the $750m sukuk maturing in January of next year.

* with Bloomberg @Email:business@thenational.ae

Back to the top

More articles


Editor's Picks

 The Greens, villas: Q1 no change. 3BR - Dh210-250,000. 4BR - Dh210-260,000. 5BR - Dh220-300,000. Q1 2013-Q1 2014 5% rise. Pawan Singh / The National

In pictures: Where Dubai rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Dubai have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 Above, the private pool of Ocean Heights' five-bedroom penthouse flat. Courtesy Christie’s International Real Estate

In pictures: Penthouse flat is height of Dubai luxury living

A five-bedroom penthouse in Ocean Heights in Dubai Marina is on sale for Dh25 million and comes with a private pool and an unparalleled view of Dubai.

 The cooling towers of the Temelin nuclear power plant near the Tyn nad Vltavou in Czech Republic. The country wants to continue expanding nuclear energy capacity despite cancelling a tender to build two new units. David W Cerny / Reuters

In pictures: Best business images for the week to April 17, 2014

Here are some of the best business images for the week to April 17, 2014.

 A sign points the way to an outdoor market popular with German visitors on the Polish side of the German-Polish border. Sean Gallup / Getty Images

In pictures: A decade since the European Union went east

May 1 will mark 10 years since the European Union expanded east, taking in countries like Poland, the Czech Republic and the Baltic states as new members. And though the border region between Germany and Poland is flourishing with trade and cultural exchange, the open border has also brought a sharp rise in crime.

 The Wind, Energy, Technology and Environment Exhibition takes place from April 14 to April 16. Above, the Dewa showroom during last year’s Wetex. Jaime Puebla / The National

April corporate and economic calendar for the UAE and overseas

From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.

 Get the latest information on credit cards, bank accounts and loan products in the UAE. Mark Lennihan / AP Photo

Rates report: Latest on UAE loans, accounts and credit cards

Souqamal.com brings you the latest interest rates on banking products in the UAE.

Events

To add your event to The National listings, click here

Get the most from The National