|
 The deal closes one chapter in Dubai's efforts to get its financial
house in order nearly a year after it shocked global markets by
acknowledging it couldn't repay all its bills.
State-owned Dubai World announced last month that nearly all its
creditors had signed on to the debt restructuring plan, which
extends the amount of time the firm has to repay lenders. The lack
of total agreement could have drawn it into protracted and
potentially costly legal wrangling.
Dubai World confirmed it had all lenders on board but gave no
details.
"We've reached a 100 percent agreement with creditors," a spokesman
said, speaking on standing company rules of anonymity.
Dubai World gained full support after a U.S. distressed debt firm
that had been holding out on the deal sold a $5 million sliver of
debt to Deutsche Bank, according to a report Wednesday in the
Financial Times.
Deutsche Bank spokesman Michael Lermer declined to comment, citing a
possible relationship with a client. The New York-based debt firm,
Aurelius Capital Management, couldn't immediately be reached.
Dubai worked for months to convince more than 70 lenders to sign on
to its restructuring plan. The deal offers creditors full repayment
on the principal of their outstanding loans over a five to eight
year period. Several banks balked at the interest rates being
offered as too low.
[to top of second column]
 |
 A group of seven lenders owed the majority of the debt -- Bank of
Tokyo-Mitsubishi UFJ, HSBC Holdings PLC, Lloyds Banking Group PLC,
Royal Bank of Scotland Group PLC and Standard Chartered PLC, and
local banks Emirates NBD and Abu Dhabi Commercial Bank -- agreed to
the proposal in May. Convincing smaller lenders took longer.
Creditors not wanting to take the restructuring offer could have
taken their case to a special tribunal set up by the government.
That route is untested, however, and could have exposed lenders and
Dubai World to months of litigation.
The company's sprawling business interests range from seaports and
hotels to luxury retailer Barneys New York and a stake in the
CityCenter complex on the Las Vegas Strip.
Dubai is eager to move beyond the crisis, which has bruised the
city-state's reputation, because it must still tackle billions more
dollars of debt owed by other state-linked companies. The
International Monetary Fund estimates the emirate and its web of
state-linked companies owe as much as $109 billion.
[Associated
Press; By ADAM SCHRECK]
Copyright 2010 The Associated Press. All rights reserved. This
material may not be published, broadcast, rewritten or
redistributed.
 |
