Abu Dhabi: The seven-member creditor committee in charge of negotiating a settlement with Dubai World is expected to reply to the conglomerate's debt restructuring proposal within weeks, a senior banking official said yesterday.
"Once we're done reviewing [the proposal] thoroughly, we will reply to them," Ala'a Eraiqat, CEO of Abu Dhabi Commercial Bank, one of two UAE banks on the committee, said. "We owe it to Dubai World to get back to them officially."
The committee, which represents more than 90 creditors of Dubai World, has not responded publically to the company's March 25 proposal to restructure $23.5 billion (Dh86.3 billion) in debt. Only committee member HSBC has called the plan "reasonable."
Eraiqat said his bank has not yet set provisions against its exposure to Dubai World. Earlier this year he said ADCB's exposure to the group totalled $2.7 billion.
"We're looking into provisioning against Dubai World," Eraiqat said. "Every restructuring has certain implications for provisioning and we're assessing that."
The Government of Dubai has proposed funding Dubai World and its property development subsidiary Nakheel with up to $9.5 billion in cash and refinancing the rest of the companies' borrowings over five and eight-year plans.
According to the proposal, the government will also convert the $8.9 billion (Dh32.7 billion) it is owed by Dubai World and the $1.2 billion (Dh4.4 billion) owed by Nakheel into equity.
Since the government is already a full owner of both, this means the debt will be written off.
