Dubai World proposes to convert $8.9 billion debt into equity
25 Mar 2010
Dubai World today presented a fresh restructuring proposal involving conversion of $8.9 billion of its outstanding debt into equity.
The administrators of the Dubai Financial Support Fund (DFSF), which overseas the holding company's revival, is reported to have submitted the proposal to the coordinating committee representing its financial creditors.
Dubai World had total financial liabilities of $23.5 billion as of 31 December 2009.
The government of Dubai acting through the DFSF proposes to convert $8.9 billion of debt and claims, representing 38 per cent of the total amount of standalone debt and guarantees of Dubai World, into equity, subordinating its claims to other creditors, a Dubai World release said.
DFSF will also commit up to $1.5 billion to fund Dubai World's working capital and interest payment commitments that will arise from the new debt facilities.
Under the proposal, non-DFSF creditors will receive 100 per cent principal repayment through the issuance of two tranches of new debt with five and eight year maturities.