Sunday, 14 February 2010 at 12:05, Reuters, Dubai
Dubai World, the debt-laden conglomerate in the midst of restructuring, will offer creditors a 60 per cent return on debt over seven years with a sovereign guarantee, Dow Jones reported on Sunday.
Citing two unnamed bankers, the report said the proposal was one of two offers that were going to be made to creditors and did not pay interest.
The second offer would see creditors get full repayment, including 40 per cent of their Dubai World debt in the form of assets in property developer Nakheel, with no government guarantee and also over seven years, Dow Jones said, citing the bankers.
"There will be two offers on the table by the end of April," according to one banker cited by Dow Jones.
Dubai World rocked global markets on November 25 with plans to request a delay on repaying $26 billion in debt linked to its main propery units Nakheel and Limitless World.
It staved off default on a $4.1 billion Islamic bond linked to Nakheel, after a last minute bailout from Abu Dhabi.
The company has been negotiating with an unofficial seven-member bank coordinating committee but has yet to present a formal proposal on plans to repay the debt.
"Neither the government nor the company have put forward any restructuring proposals to the lenders at this time," a government spokeswoman said in an emailed statement on Sunday.
"The government is continuing to fund the expenses of the company's and the lenders' legal and financial advisors so that they have the appropriate amount of time to understand the company and its business plans so that any future proposals can be rationally analyzed."
On Friday, Dubai debt insurance costs surged to 2-1/2 month highs and bond yields rose as growing uncertainty over the fate of the debt-laden conglomerate Dubai World sent investors scrambling to hedge their exposure.
Consider also reading:
Dubai World creditors to file claims soon
Dubai World may seek loan extension from creditors
Dubai government won't back Dubai World debts
Dubai World may owe ADCB nearly $2bn: sources
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