LONDON, (Reuters) – Debt restructurings in Dubai are likely to drag on for at least another year, having been held back while conglomerate Dubai World DBWLD.UL reached a resolution on its loans, a senior advisor said on Thursday.
Philip Davidson, global head of restructuring at KPMG KPMG.UL, which advised lenders to Dubai World, told the Reuters Restructuring Summit that other situations had been on hold in the emirate until more clarity emerged on that restructuring.
Other delayed debt negotiations were only now moving ahead, Davidson said.
“That process has only been going on for four or five months,” said Davidson, who was leading the team of restructuring experts at KPMG advising Dubai World creditors on almost $25 billion of claims. “As a simple matter of volume, it will take at least a year for all of these issues to wash through the system.”
Several loan negotiations have already been extended in recent weeks, including those for real estate groups Nakheel NAKHD.UL and Limitless, units of Dubai World.
The Limitless restructuring is now likely to be pushed into next year.
Nakheel, however, said it hoped to settle claims with its trade and financial creditors by the end of 2010.
These restructurings remain outstanding after Dubai World secured near-unanimous approval for its debt plan in September.
Davidson said Dubai World’s success in reaching a resolution with creditors would help allay fears about the emirate’s debt worries, smoothing the way for other restructurings.
“Dubai World draws a line under the risk of systemic failure of Dubai, and makes it possible to size the problem,” he said.