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DUBAI : Dubai's debt-laden group Dubai World invited creditors to meet on July 22 to agree on terms for restructuring 60 percent of its debts, an official familiar with the matter told AFP on Sunday.
Dubai World has invited its creditors who comprise "73 banks in total, to a meeting on July 22" to provide information on its proposals for debt restructuring, an official told AFP on condition of anonymity.
"There will be no vote or resolution sought at the meeting, this will still take some months," the official added.
He added that the Coordinating Committee of banks, which includes seven banks representing 60 percent of the group's bank lenders, "has already approved the deal and agreed terms with the company."
The embattled group whose default fears had rocked global markets said on May 20 that it had reached agreement "in principle" with most of its bank lenders to restructure some 23.5 billion dollars in debt.
"Dubai World is pleased to announce that headline economic terms have been agreed in principle with the Coordinating Committee," the company had said in a statement.
According to the agreement, the company will divide 14.4 billion dollars of debt into two tranches, maturing in five and eight years respectively, while the government will convert 8.9 billion dollars of aid to the company into equity.
The first tranche of debt will be valued at 4.4 billion dollars and will bear 1.0 percent interest with no government shortfall guarantees, while the second will be worth 10 billion dollars, bearing also 1.0 percent interest plus varying options of payment in kind and shortfall guarantees, it said.
Dubai World's major lenders include four British banks -- HSBC, Lloyds, RBS, and Standard Chartered. Other banks include the Bank of Tokyo, in addition to the local Abu Dhabi Commercial Bank and Dubai's Emirates NBD bank.
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.
- AFP /ls
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