Dubai: Dubai World has not put forth an official proposal to the lenders of $26 billion worth of debt, a source close to the matter told Gulf News on Sunday.
A media report said Sunday that two offers may be put on the table. One offers 60 per cent repayment after seven years, in a plan that may come with a sovereign guarantee but does not pay interest, Zawya Dow Jones quoted two anonymous bankers.
The second offer may see creditors get full payment, including 40 per cent of their Dubai World debt, in the form of assets in Nakheel, with no government guarantee over seven years, according to the bankers.
"Neither the government nor the company have put forward any restructuring proposals to the lenders at this time," a government spokeswoman said in a statement yesterday.
"The government is continuing to fund the expenses of the company's and the lenders' legal and financial advisers so that they have the appropriate amount of time to understand the company and its business plans so that any future proposals can be rationally analysed."
In November, Dubai World asked for a six-month standstill on its debt and requested the restructuring of $26 billion worth of obligations.
On December 14, the Abu Dhabi Government injected $10 billion into the Dubai Support Fund, specifically for Dubai World's obligations. Of the total, $4.1 billion was used to pay off a maturing Nakheel sukuk on that day, while the rest was supposedly set aside to pay the contractor and suppliers related to Nakheel's developments.
Dubai World has also been paying interest on the rest of its obligations using the government funding, which ends in April.
It is negotiating with an unofficial seven-member coordinating committee of banks from the UAE, Britain and Japan, which combined have about two-thirds of total exposure to the conglomerate.
In reaction to the media report, the Dubai Financial Market benchmark fell 3.5 per cent to 1,618, its largest decline since January 26.
Abu Dhabi's index also fell, falling 0.6 per cent to 2,726 and retreating from Thursday's month-high.
UK fully supportive
UK Business Secretary Peter Mandelson discussed with the Dubai Government the issues of British banks and construction companies in the emirate.
The British government will stand by the emirate because "we believe in Dubai, admire it and believe in its future", Mandelson said in a speech in Dubai yesterday. "We want to be part of the upturn" once Dubai recovers, he said.
-- Bloomberg
