x Abu Dhabi, UAEMonday 24 July 2017

HSBC to sign Dubai World debt restructuring plans

HSBC, a major creditor of Dubai World, will sign the conglomerate's debt restructuring proposal.

HSBC, a major creditor of Dubai World, is ready to sign the conglomerate's debt restructuring proposal, according to its chairman for the Middle East and Europe. "Yes, we would sign today if they put it in front of [us]," said Stuart Gulliver, who also oversees the British bank's global wholesale banking. Mr Gulliver is accompanying Stephen Green, the bank's group chairman on a trip through the region. He stressed that HSBC was speaking as a major private creditor and not as a member of the seven-member Coordinating Committee (CoCom), which is co-ordinating Dubai World's restructuring among its 97 creditor banks.

"It is a very reasonable proposal. It is a positive step forward, and we are supportive of the action taken by the Dubai government. We are very, very close to having a completely satisfactory outcome." Mr Gulliver also said the bank knew the exact conditions attached to the rollover of each loan. Each creditor bank can choose the new maturities when rolling over the existing loans and knows exactly which commercial terms will be attached to it. He added: "This is a general proposal, we do know the interest rates, we are comfortable with the terms.

"Yes, that is correct. Now each bank will go back and agree to the terms to sign the document." His comments come as a surprise after several lenders privately expressed their dissatisfaction that they did not know the exact commercial terms attached to the rolled over loans. As part of its US$23.5 billion (Dh86 bn) restructuring, Dubai World last week offered its creditor banks, who were owed an overall US$14.2 billion at the end of 2009, to roll over their full principal between five and eight years, but did not spell out the interest rates in a statement.

Creditor banks of Nakheel have also been offered to roll over their loans based on Eibor/Libor. Mr Gulliver also said his bank "understands why bondholders have a slightly different treatment." Some bankers have privately expressed their dissatisfaction that the Nakheel bondholders will be repaid in full, while lenders will have to roll over their maturities at what is expected to be lower than commercial rates.

He stressed, however, that no documents have been signed so far. Asked whether local and international banks had been treated differently, he said, "Not as far as I see. As far as I can see there are no hiccups or roadblocks to the Dubai debt deal," adding that his comments solely reflected HSBC's view.