Dubai : Dubai World will continue to protect as many of its assets from distress sales as it raises cash from operations of the conglomerate's ports operator DP World, Jebel Ali Free Zone and Dubai Maritime City and Dry Docks World, analysts said.
In a restructuring proposal document for bankers obtained by Reuters, Dubai's largest holding company said these are "strategic assets" which may generate up to $11.8 billion (Dh43.3 billion) in the next eight years. Restructuring of $14.4 billion worth of debt has been accepted by the main creditors — seven banks making up core coordinating committee — with a five and eight year maturity. The rollover comes with up to 1 per cent of interest.
A Dubai World spokesperson told Gulf News the port operator will continue to be ringfenced, and that no plans have been changed since the initial proposal issued in May.
Meanwhile, quoting the document, Reuters reported that DP World has now been included in the restructuring, and said that analysts forecast the operator to generate $3.1 billion in revenues this year earnings before interest, tax, depreciation and amortisation (EBITDA) at $1.1 billion.
"DP World and Economic Zones World are the group's most cash generative assets, however operating company debt severely restricts cash flow available to Dubai World," the document was quoted to have said. DP World chief executive Mohammad Sharaf declined to comment to Gulf News on the possibility of company sale or the revenue projections.
The assets of Dubai World that the company is prepared to sell in order to raise as much as $19.4 billion, include stakes in luxury retailer Barney's, the Atlantis Hotel and casino operator MGM Resorts International, within the plan to raise up to $7.6 billion in five years.
Dubai World has secured an agreement from the core committee represented by seven banks that hold about 60 per cent of debt. Trying to secure support from the rest of the creditors by October 1, Dubai World spokesperson said that any remaining banks not agreeing to the terms would be able to take their case to the special tribunal set up at Dubai International Financial Centre (DIFC) Courts.
A sales asset is one option that the firm could take by the end of an 8-year period at the maturity of the roll over proposal.
"If you've got two-thirds [of creditors agreeing to restructuring terms] you're in a position to go to the tribunal, to be heard favourably," the spokesperson said, "… 66.67 per cent is strong position," he added.
