- The Washington Times - Tuesday, April 27, 2010

DUBAI, United Arab Emirates | One of Dubai World’s major creditors said Monday that restructuring talks with the debt-laden conglomerate are moving ahead and should be resolved soon.

The comments from local bank Emirates NBD came as one of Dubai World’s key subsidiaries announced it has begun signing settlement deals with contractors that helped build the Gulf city-state’s iconic artificial islands and luxury homes.

Rick Pudner, chief executive officer of Emirates NBD, said negotiations with the struggling state-owned Dubai World are ongoing and “progressing very positively.”

“A lot of progress has been made over the last few weeks. We are hoping for a satisfactory resolution,” Mr. Pudner told reporters during a conference call.

The Dubai-based bank is part of a committee of leading creditors trying to reach a resolution with Dubai World. The conglomerate shocked global markets late last year by seeking new terms on $26 billion in debt — a fraction of the more than $80 billion owed by the semiautonomous city-state.

Emirates NBD is one of two Emirati banks on the negotiating committee, which includes international lenders such as HSBC Holdings PLC, Royal Bank of Scotland Group PLC and Standard Chartered PLC.

It is the only one of the bank creditors that’s majority owned by the Dubai government, which holds a controlling stake through its Investment Corp. of Dubai investment arm. Nearly two-fifths of the company is publicly traded.

Mr. Pudner said he hoped a resolution would be reached with Dubai World “in the not too distant future,” though he acknowledged that the exact time frame remains uncertain.

“Certainly in the next few weeks,” he said, declining to discuss the specific terms Dubai World is offering lenders.

Dubai’s government announced last month it would pump up to $9.5 billion into the struggling conglomerate as part of a long-awaited restructuring plan. That proposal still needs approval from dozens of creditors, including Emirates NBD.

Meanwhile, Dubai World subsidiary Nakheel, the property developer responsible for the emirate’s palm-shaped islands, said in an e-mailed statement it has begun signing settlement agreements with contractors and suppliers awaiting repayment as part of the plan laid out last month.

That deal calls for those trade creditors to receive 40 percent of what they are owed in cash and the rest in an interest-bearing security. The repayment will be carried out after Nakheel gets the agreement of creditors to whom 65 percent of the debt is owed.

“This is expected to be achieved in the very near future; all indications suggest that this will be a prompt process,” Nakheel said.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide