Debt-laden company holds first meeting with creditors
Dubai World hopes to persuade creditors to agree a delay on repayments of about $22bn of debts in January 2010, according to bankers who attended a meeting with the firm and its advisers.
The company held a meeting with creditors on 21 December. This is the first such meeting since it announced plans to seek a standstill’ on its debt obligations in late November. Nothing was agreed at the meeting, but bankers who attended say that Dubai World plans to offer the standstill agreement in January.
In a statement issued by Dubai World after the meeting, the company said it was “committed to working closely with the banks to work towards a consensual solution for the benefit of all lending banks, trade creditors and other stakeholders affected by the restructuring”.
It also said that the Dubai Financial Support Fund, a body set up by the Dubai government to help its companies in financial distress, will continue to provide funds to cover working capital and interest payments, on the condition that a standstill was successfully implemented.
Under the terms of a $10bn bond that Dubai raised earlier in 2009 to help pay off some of Dubai World’s debts, the company must reach an agreement with creditors by 31 April 2010.
The creditor banks have set up a steering committee to co-ordinate their response to Dubai World.
The committee is made up of the Royal Bank of Scotland, HSBC, Standard Chartered and Lloyds Banking Group, all of the UK, as well as the local Emirates NBD and Abu Dhabi Commercial Bank.
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