Government to restructure holding company
Dubai World, the Dubai government’s largest holding company, will ask for more time to pay back the $27.2bn it owes to creditors.
According to a statement on 25 November, the Dubai government will also restructure Dubai World, which owns the emirate’s Ports Customs & Free Zone Authority, the real estate developer Nakheel, the ports operator DP World, Dubai Drydocks, and Jebel Ali Free Zone Authority.
According to the statement, “As a first step, Dubai World intends to ask all providers of financing to Dubai World and Nakheel to ‘stand still’ and extend maturities until at least 30 May 2010”.
Also on 25 November, the Dubai government announced it had raised another $5bn as part of its $20bn sovereign bond programme.
Abu Dhabi’s National Bank of Abu Dhabi and Al-Hilal Bank each bought half of the new bond issue.
However, according to the statement from the Dubai government, it will not use money from the new bond issue to restructure Dubai World.
The government’s Supreme Fiscal Committee has authorised the Dubai Financial Support Fund to spearhead restructuring of Dubai World.
The fund has appointed Aidan Birkett, managing partner in corporate finance at Deloitte, as chief restructuring officer.
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