(MENAFN- Khaleej Times) Dubai World and its core creditor banks began on Wednesday crucial negotiations on restructuring the conglomerate's $26 billion debt "on a positive note," sources close to the
discussions said.
Dubai World, the parent organisation of leading property developers Nakheel and Limitless World, has been in talks with its 97 lenders, including foreign and local banks, on debt restructuring since November when the conglomerate asked for a debt standstill deal. "However, the new round of talks is expected to result in a final and amicable settlement," a spokesman of a creditor bank told Khaleej Times on condition of anonymity.
The committee of main creditors negotiating on behalf of banks with Dubai World's team headed by chief restructuring officer Aidan Birket includes HSBC Holding PLC, Standard Chartered PLC, Lloyds Banking Group PLC, Royal Bank of Scotland Group PLC, Abu Dhabi Commercial Bank PJSC and Emirates NBD PJSC. "Things look very positive," a Dubai World spokesman was quoted by Reuters as saying as negotiations entered a decisive phase with a repayment deadline looming. Limitless has a $1.2 billion Islamic loan due on March 31.
Former British minister Shriti Vadera, has also been in Dubai for weeks to play a key role in hammering out the debt proposal, the news agency added.
Early this month, British Trade Minister Lord Mervyn Davies also hinted of progress in Dubai World's talks with creditors, including four UK banks. Davies trip to the UAE was nearly a month after the visit of British Business Secretary Peter Mandelson, who also had called for a smooth settlement of the debt issues.
Shaikh Ahmed bin Saeed Al Maktoum, President of Dubai Civil Aviation Authority and Chairman and Chief Executive of Emirates Airline and Group, said on March16 that the state-owned conglomerate would present to creditors a "fair and acceptable plan" soon.
He also had hinted that the restructuring would be drawn up with consideration to the long-term interests of the banks, contractors and Dubai. Shaikh Ahmed maintained the government's intention was to put something that would be acceptable to everybody. "We believe that whatever we will put on the table should be a very fair deal for everybody," he said. "And we as a government will always support it."
During his recent visit to India, Shaikh Ahmed said the government was trying "to separate the bad business from the good. "There are a lot of good businesses like the port, free zone and dry dock," he said and added the government was "always behind" Dubai World.
Yesterday, banking sources sounded optimistic that lenders would get a range of options including full repayment contrary to talks of a so-called "haircut," meaning they receive less money than they're owed. According to analysts, possible settlement scenarios are: repayment in full over five years but with no interest paid in that period; repayment over seven years with interest at about 2 per cent; repayment over a minimum of eight years with interest paid at close to the one-year London interbank offer rate.
By Issac John
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