Posted by Neil King
Dubai World has announced that headline economic terms have been agreed in principle with a majority of the company's financial creditors regarding the restructuring of its financial liabilities.
The agreements have been made with the Coordinating Committee ("CoCom") which represents approximately 60 per cent of bank lenders with interests in the investment conglomerate.
Dubai World and CoCom have been engaged in discussions since a restructuring proposal was presented on March 24, 2010 in which the Government of Dubai pledged to convert $8.9 billion of debt and claims into equity.
The proposal has now been refined to provide different options designed to better accommodate the needs of Dubai World's large and diverse lending group.
These centre on the separation of the company's liabilities into two tranches of five and eight-year maturities, with each lender receiving a rateable portion of both while also being allowed to select the terms and conditions of their particular stakes.
Aidan Birkett, chief restructuring officer of Dubai World, said: "The proposal puts the company on a sound financial footing and reflects the continued support of the Government of Dubai and its lenders. It offers the company the ability to maximise the value of its assets over the medium to long term."
The news comes after the first trade licence for business operations on the Dubai World islands project was granted to Kleindienst Group last week for its Heart of Europe luxury resort.