Dubai World Lenders ‘Positive’ About Debt Plan, Al Saleh Says

Bloomberg -

Dubai World creditors are “positive” on the state-owned holding company’s debt restructuring proposals, the emirate’s finance chief Abdulrahman Al Saleh said.

This represents “a preliminary indication the plan is being deemed acceptable,” Al Saleh said in remarks reported by the official WAM news agency today, citing an interview on Dubai state television.

Dubai said yesterday it will support Dubai World’s debt restructuring with $9.5 billion as the company asked creditors to wait up to eight years to receive all their money back. Dubai World said in November it would seek to delay repaying debt until May, roiling markets worldwide.

The company said yesterday it is seeking to renegotiate $23.5 billion in debt with creditors, with $14.2 billion owed to lenders other than the government at the end of 2009.

“The main elements of the proposal made by Dubai World will not change, but some details require more discussions with relevant parties to arrive at an agreeable formula,” Al Saleh said, according to the WAM report.

The proposed plan doesn’t intend to favor holders of Islamic bonds of property unit Nakheel PJSC over other creditors, Al Saleh said. The nature of the instrument required the decision for payment on maturity, he said.

Nakheel will receive $8 billion in funding and $1.2 billion by converting government debt to equity, Dubai said yesterday.