x Abu Dhabi, UAEFriday 28 July 2017

Job done for Birkett

Expert says task is virtually complete and now is time to look at taking on new challenges.

Restructuring officer to step down Expert says task is virtually complete and now is time to look at taking on new challenges Frank Kane The timing of the decision by Aidan Birkett to resign as chief restructuring officer of Dubai World - announced yesterday by the Dubai Government Media Office - was a surprise but his departure was not unexpected. The restructuring expert, 57, has been telling friends and colleagues for some weeks that the job was "largely done" at the indebted conglomerate and it would soon be time for him to move on to the next challenge. Last month, Dubai World announced that 99.9 per cent of bank creditors to the group, and the Nakheel property company it owns, had signed up to its restructuring proposal on its US$24.9 billion (Dh91.46bn) debt.

"It's a different job now, down to the nitty-gritty of the documentation process. Aidan is a strategist and would not be involved in that anyway," said one of the bankers involved. It might be argued that his job was "largely done" back in May, when it was announced that the steering committee of six banks negotiating with Mr Birkett and accounting for more than 60 per cent of Dubai World debt by value had agreed to the deal.

They signed up for a new repayment schedule of between five and eight years and new terms which, while avoiding the dreaded "haircut" (forced reduction in the principle amounts owed), still involved creditors getting less back than they originally agreed. Nakheel creditors and customers also accepted new terms for repayment of their debts and completion of their properties, involving a mixture of immediate cash settlement and deferred equity.

"To have restructured such a large amount of debt at Dubai World involving so many banks and other creditors, in a relatively short space of time, is a real achievement. Aidan deserves credit as head of the team that accomplished it," said the banker Only one financial institution, a relatively small US hedge fund called Aurelius Capital Management with $5 million of Dubai World debt, has held out against the new terms.

When Mr Birkett was appointed the chief restructuring officer last November, the announcement of a restructuring of Dubai World debts sent world markets into turmoil. Fears that creditors to the group, which has a total of $60bn of debt, would lose out sparked broader worries about sovereign debt markets. In the event, Dubai World met its immediate obligation - a $4bn sukuk repayment by Nakheel in December. By March, Mr Birkett - formerly the head of corporate finance at the accounting firm Deloitte - was in a position to announce terms of the restructuring plans. Initial scepticism from some creditors was overcome in a series of top-level meetings between bankers and senior executives in Dubai.

The Dubai Supreme Fiscal Committeewill now put in place a permanent team to see the restructuring through and implement the new business plan. The committee is chaired by Sheikh Ahmed bin Saeed Al Maktoum, the chairman of the Emirates Group, Ahmed Humaid al Tayer, the governor of the Dubai International Financial Centre, and Mohammed al Shaibani, the chief executive of Investment Corporation of Dubai.

High on the list of priorities will be an asset disposal programme to finance the debt repayment. Earmarked for disposal are the stakes Dubai World holds in the Atlantis hotel in Dubai and the US retailer Barneys. No decision has been made on whether to sell core assets. fkane@thenational.ae