Money Markets
Dubai lenders negotiate debt recovery
A shopper in Dubai Mall. Dubai World’s lenders are meeting on Monday to decide whether to agree to a six-month standstill request on the company’s $26-billion debt pile. Photo/REUTERS
Posted Monday, December 21 2009 at 00:00
Dubai introduced new laws on Monday that would allow Dubai World and its subsidiaries to file for bankruptcy, making it easier for corporate debt to be restructured via local courts, rather than relying on sovereign support.
The new law will include a tribunal panel to adjudicate on potential claims against Dubai World arising from its restructuring.
The immediate implications for creditors are unclear.
d) Broader restructuring for Dubai Inc. Banks want to see a broader refinancing plan for all of Dubai Inc’s debt maturing in the next two to three years, including loans for Borse Dubai and Dubai Holding along with possible refinancing options.
This is likely to happen alongside the Dubai World standstill due to Dubai’s restricted access to capital markets and the weak debt positions of Dubai Holdings and Borse Dubai.
Dubai Holdings and Borse Dubai could either negotiate separate standstill agreements with lenders or have their debt rolled into a wider restructuring.
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