Dubai World agrees to bailout terms from lenders panel

FINANCIALLY troubled Dubai World, which owns the otherwise successful DP World container terminal operator, has agreed to the terms offered by a committee of creditors to reschedule US$23.5 billion of debt accumulated by the state-owned conglomerate.

The lenders' committee members account for 60 per cent of the bank creditors, said a Dubai World statement. The deal also requires the agreement of the rest of Dubai World's creditors and the company and the committee will work to achieve this.

Said Dubai World debt restructuring officer Aidan Birkett: "This is an important milestone. The proposal puts the company on a sound financial footing and reflects the continued support of the Government of Dubai and its lenders."

A portion of the company's debt will be first paid with $14.4 billion in two tranches with $4.4 billion in tranche A with a five-year maturity and $10 billion in Tranche B with an eight-year maturity.

The Dubai government is converting $8.9 billion of debt into equity, and committing to fund up to $500 million of SG&A expenses and an interest facility of up to $1 billion while maintaining 100 per cent ownership of the company.

(Source: www.schednet.com)