Dubai: Dubai World, the state-owned company at the centre of the emirate's 2009 debt crisis, reached a deal with its main creditors to extend the repayment of $10.3 billion of debt, two people with knowledge of the matter said.
The group, which owns the world's third-largest ports operator, agreed with its creditor committee to repay in 2022, four years later than previously agreed on, the people said, asking not to be identified because the information is private. Dubai World also agreed to repay $4.4 billion of loans due in September 2015 early if all creditors approve the deal, the people said.
Dubai's accelerating economy is prompting companies to renegotiate loan terms and seek new deals as interest rates decline. Dubai World signed the debt deal with about 80 creditors to restructure $14.7 billion of debt in March 2011.
HSBC, Standard Chartered, Bank of Tokyo Mitsubishi., Emirates NBD and Abu Dhabi Commercial Bank constitute the creditor committee. Dubai World agreed to increase the interest rate it pays on the loans from the average 2.4 per cent agreed to in 2011. By extending the loan maturities, Dubai World may be able to retain key assets it would have to sell to meet debt repayments, the people said.
Dubai World plans to present the new plan to other creditors next month, the people said. It needs the consent of at least 67 per cent of the creditors to complete the deal. Extending the loan maturities will obviate the need for Dubai World to sell key assets to meet debt repayments, they said.
Dubai, the Gulf's trade and tourism hub, was battered by the global credit crisis which pulled down property prices by almost 60 per cent from the 2008 peak. The economy is now rebounding as the real-estate and tourism industries recover