Dubai World will first repay interest rates on loans to its creditors as part of a restructuring plan reached with most creditors this week after several months of negotiations, a senior financial official was quoted on Saturday as saying.
Ahmed Humaid Al Tayer, member of Dubai’s Supreme Fiscal Committee, said the approval by over 99 per cent of the creditors of the emirate’s restructuring of nearly $24.9 billion of liabilities would restore confidence in Dubai.
Tayer, Chairman of Emirates NBD bank, said the agreement announced by the DW on Friday rebuffed what he described as continuous campaigns against the emirate’s ability to meet its financial commitments.
“The repayment process will begin with payment of interest rates, then loan installments…this will depend on the nature of each loan as some of them are consolidated loans while others are bilateral…some others are bonds,” Tayer was quoted as saying by the Arabic language daily Al Bayan.
“This agreement with creditor banks and their approval of the DW offer will pave the way for a new stage of restoring confidence in Dubai’s economy…it will also open the door for all parties to start a new phase.”
Tayer said the agreement followed lengthy negotiations with the creditors because DW wanted to reach “the best solutions” for all parties given the large size of the debt and the fact that it was the first time such a type of restructuring plan is carried out by a major state conglomerate.
“There had to be a sort of conviction by all parties because the restructuring plan involves a massive sum of nearly $25bn and concerns such a global establishment as DW, which has links to many global institutions… the plan also involves more than 80 local and global banks,” he said.
“This means we had to reach a convincing agreement through negotiations… I believe that the approval of the DW restructuring plan by most of the banks illustrates the high degree of professionalism through which DW has dealt with this issue to guarantee the rights of all parties… this professionalism has also ensured that DW will resume its normal role in economic development in the UAE in general and Dubai in particular.”
Tayer said the agreement that followed tough talks with creditors over the past nine months would allow creditors to benefit from Dubai’s massive resources.
“Since last November, there have been continuous media campaigns against Dubai and its ability to honour its financial obligations… this agreement will enable all parties to benefit from Dubai’s enormous resources, including its advanced infrastructure, economy, trade, transport, tourism and financial services… these capabilities will allow Dubai to rebuild itself and maintain its position as the Middle East’s trade and services centre.”
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