Dubai: Dubai World said on Monday it has secured an agreement with the legal number of creditor banks necessary to amend and extend the maturity of $14.6 billion in debt.

The state-owned conglomerate will make an early repayment of $2.82 billion due this year and extend the current debt due date of 2018 to 2022, the company said in an emailed statement. It also said it has guaranteed increased pricing and additional collateral as part of the agreement.

Dubai World said it reached the agreement with a “substantial majority by value of its credit banks,” which reportedly includes HSBC, Royal Bank of Scotland Group, Standard Chartered, Emirates NBD and Abu Dhabi Commercial Bank.

Jaap Meijer, executive director at Arqaam Capital, said the agreement will mean banks will now have 100 per cent recovery and will not require an impairment for the exposure.

“They don’t have to get a soft interest rate so that is attractive for banks and over time they can probably sell assets to reduce their overall leverage,” he also said by phone.

Dubai World will enforce the agreement under Decree 57; a Dubai government law legislated in 2009 to handle the debt restructuring associated with Dubai World and its entities. Decree 57 requires two thirds of creditors by value to approve the agreement for it to be enforced on all creditors by a Dubai court. Decree 57 was used by Dubai World-entity Drydocks World in 2012 to force unwilling debtors to accept a $2.2 billion debt plan.

Dubai World said the Decree 57 threshold “has already been comfortably exceeded” and that it aims to sign up more lenders to the agreement during the Decree 57 process, which will take “several months to complete.”

Dubai World said “the agreement represents a ‘win-win’ for the Company and lenders, providing an improvement on the existing credit agreements for both sides.”

Entities Dubai World Group Finance Limited, Istithmar World Holdings LLC, Istithmar World PJSC and Port & Free Zone World FZE have acted as guarantors under the existing facility, Dubai World said.

It was reported last year Dubai World was offering shares in entity DP World, one of the world’s largest port operators, as collateral to push through the new debt agreement.

In the year leading up to Monday’s announcement there were several sell-offs of assets among Dubai state-owned companies that added to Dubai World’s cash flow.

DP World said last November it had agreed to buy Economic Zones World for $2.6 billion from Dubai World. Empower, a Dubai-owned district cooling company, purchased Palm Utilities for $500 million in January last year off Dubai World subsidiary Istithmar, while sovereign wealth fund Investment Corp of Dubai (ICD) acquired landmark hotel the Atlantis for an undisclosed sum from a unit of Dubai World in December 2013.

Before Monday’s announcement, Dubai World had been in talks with lenders for months to extend the largest single repayment under a $25 billion debt restructuring agreement struck in 2011 and had hired Blackstone to advise on the restructuring.