Dubai World, the struggling state-owned conglomerate whose debt problems sent shockwaves around the world last year, says it has reached an agreement “in principle” with its main creditors to restructure $23.5 billion of its enormous debt pile.
The move provides some hope that the major drag on the Gulf Arab Emirate’s economy can now be removed quickly.
BBC: “We are pleased that we have received unanimous support in principle… on the headline economic terms to our restructuring proposal,” said Aidan Birkett, chief restructuring officer of Dubai World.
“This is an important milestone and reflects our efforts to achieve the best possible solution for all stakeholders.”
The debt-laden company also said that it would be left with debts of $14.4 billion after the restructuring. Under the agreement Dubai World will repay $4.4 billion of loans, 30% if its debt, in five years and $10.2 billion over eight years. The remaining $8.9 billion is owed to the Dubai government, which will convert the debt into equity.
The deal, which has no new financial aid from the government, must still be approved by creditors outside the core negotiating panel, Dubai World said on Thursday.