Dubai World to restructure $26-billion debt
01 Dec 2009
Dubai World today announced a restructuring plan for about $26 billion in debt out of an estimated $59 billion it owes others, helping markets across the globe edge higher.
Dubai World, the government-controlled holding company, which has investments in sectors including finance, investment and tourism, said the restructuring plan would cover debt owed by its main property firms, Nakheel and Limitless.
"Initial discussions have commenced with the banks of Dubai World and are proceeding on a constructive basis," Dubai World said in a statement.
Dubai World's announcement, which came close on the heels of Dubai government's statement on Monday that it would not stand guarantee for the debts of Dubai World, helped soothe some investor nerves.
Dubai, which is a regional hub for finance, investment and tourism thanks to sovereign funds and investment companies like Dubai World, threw global markets into jitters last week with the credit deadlock at Dubai World and Nakheel.
While UAE markets slid further as foreign investors bailed for the exits and other Gulf markets in Qatar and Kuwait, followed on with Monday's declines, markets in Asia and the United States rallied on Tuesday.
Wall Street indices rose 0.3 to 0.4 per cent on Monday, while MSCI's index of Asia-Pacific stocks outside of Japan rose 0.6 per cent.
Dubai World, however, said the restructuring plans would not include firms such as Infinity World Holding, Istithmar World and Ports & Free Zone World, which includes DP World, Economic Zones World, P&O Ferries and Jebel Ali Free Zone, or JAFZA, which it said are financially stable.
