Dubai World’s restructuring proposal

Dubai World presented a restructuring proposal of its $23.51 billion total financial liabilities as at December 31, 2009.
The proposed restructuring will require the agreement of Dubai World’s creditors, which the company will work to secure in the coming weeks, the company's statement revealed.
Aidan Birkett, Chief Restructuring Officer of Dubai World, said: “This proposal represents the best possible solution for all stakeholders. It follows extensive discussions with our creditors, a thorough review of Dubai World’s businesses and significant financial support from the Government. It offers the Company a strong future and the opportunity to maximise the value of its assets over the medium to long term.”
Key terms of the proposal
The total amount of outstanding debt held by Dubai World’s creditors, excluding the existing Dubai Financial Support Fund’s (“DFSF”) claims, is $14.2 billion as at December 31, 2009.
The Government of Dubai acting through the DFSF is proposing to convert $8.9 billion of debt and claims, representing 38% of the total amount of standalone debt and guarantees of Dubai World, into equity, subordinating its claims to other creditors.
In addition the DFSF will commit to fund up to $1.5 billion of cash into Dubai World to fund the Company’s working capital and interest payment commitments that will arise from the new debt facilities.
Non-DFSF creditors will receive 100 per cent principal repayment through the issuance of two tranches of new debt with five and eight year maturities.
Dubai World has a number of strong companies within its portfolio and it will continue to focus on improving the performance of these assets to generate value for stakeholders.
1 Includes $4.1billion DFSF funding used to repay Nakheel sukuk due December 14, 2009 which was guaranteed by Dubai World
The Tribunal framework, established by the Government of Dubai in December 2009, remains available to protect Dubai World and its companies, their creditors and other stakeholders.
A restructuring plan regarding Nakheel, the other entity affected by the restructuring programme initiated by the Government of Dubai on November 25 2009, has also been presented to Nakheel’s creditors and is covered in a separate statement.
After careful review, Limitless has also been excluded as it does not require Government support. All other Dubai World entities continue to be excluded from the restructuring process.