Dubai World to finalize debt deal in two weeks

09 May 2010

(MENAFN) The ailing state-owned conglomerate Dubai World is close to reach a deal with its creditors within two weeks, as the government is currently in the process of refining the terms of the restructuring plan, Reuters reported.

Dubai World offered lenders a 1 percent interest rate and 1 percent payment-in kind, according to a source familiar with the matter.

Chairman of Dubai’s Supreme Fiscal committee, Sheikh Ahmed bin Saeed Al Maktoum, said that the conglomerate has given a generous proposal, saying that it does not want any damage to those companies. He said that these firms have to think about the long-term benefit of the proposal.

Al Maktoum added that the restructuring plan, which involves a $9.5 billion infusion of cash, has been well-received by creditors.

It is worth noting that Dubai’s debt plan offers Nakheel sukuk holders full payment on 2010 and 2011 Islamic bonds on maturity while trade creditors will be repaid through a mix of 40 percent cash and 60 percent in a sukuk, with a 10 percent annual return.

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