DUBAI, (AFP) – Most Dubai World creditors have agreed to the terms for restructuring the troubled conglomerate’s debts, a state-owned daily said Tuesday.
“Most of the banks have agreed on the offer after studying the size of the obligations remaining on the group and the amounts it will pay,” Al-Bayan said, citing an unidentified negotiator who represents the banks.
It is likely “that all the banks will sign the contract presented by the company,” the newspaper quoted him as saying. He said the banks would respond within two weeks, the report added.
“Standard Chartered welcomes the deal,” a senior bank official, requesting anonymity, told Dubai-based Emirates Business daily.
Others, like Royal Bank of Scotland CEO Stephen Hester described the proposal as “a welcome start,” while HSBC Bank’s Middle East CEO Simon Cooper called it “fair,” the daily said.
“I see no reason why it should not be signed in a few weeks. We would sign today,” Cooper told reporters on Monday.
The Dubai government announced in March it would inject 9.5 billion dollars into Dubai World.
After wrangling for months with creditors, the firm said it was issuing two tranches of new debt that would mature in five years and eight years.
“The offer has been well-received by the financial institutions, contractors and investors,” Khaleej Times newspaper quoted Ahmed bin Humaid al-Tayer, governor of Dubai International Financial Centre, as saying at the time.
Dubai World has said the total negotiated debt owed to creditors amounts to 14.2 billion dollars, out of the 23.5 billion dollars of debt up for restructuring.
Dubai rocked global financial markets in late November when it said it might need to freeze debt payments by its largest conglomerate, stoking fears of a state default over sovereign debt.
In order to buoy its troubled firms, since last February the emirate has issued bonds worth 20 billion dollars, which have been fully subscribed.
The Abu Dhabi-based central bank subscribed to 10 billion dollars, while the government of Abu Dhabi and two Abu Dhabi-backed banks subscribed to five billion dollars each.