Dubai Govt help part of Dubai World proposal: report
Dubai Government assistance will feature in Dubai World's proposal to creditors on how to restructure its $26 billion debt, a newspaper reported on Wednesday, citing unnamed sources.
Dubai World will discuss how it plans to repay its commitments this week with an informal bank panel, which represents 97 creditors to the state-owned conglomerate.
Arabic language daily Al Ittihad said the conglomerate would receive aid from the Dubai Financial Support Fund (DFSF) for financing operating expenses and payments to contractors to ensure the continuation of projects.
The fund would also support the restructuring process through financing Dubai World loans that are due in the short term, the sources said.
The support from the DFSF would be part of the offer Dubai World would make to creditors and still depended on their agreeement, the newspaper said.
In February, a DFSF spokeswoman said the fund had given the company about $6.2 billion over the past 12 months and stood ready to provide "considerably more".
The sources told the newspaper that government support through the fund would be made on commercial terms, charging "reasonable interest", the payment of which would begin once an improvement in the level of cash flow in Dubai World's units has been noted.
The DFSF, set up to disperse proceeds from Dubai's $20 billion sovereign bond programme to state-linked firms in need of help, is accountable to Dubai's Supreme Fiscal Committee which has overall responsibility for overseeing the emirate's fiscal policies.
The chances of the creditor banks approving the restructuring proposal was "very high", the sources said.
Dubai World had classified its real estate, investment and logistics assets according to their quality, the newspaper reported.
"Good" assets would need no intervention, while "low-yielding" assets would be susceptible to the restructuring process. Loss-making assets could be sold or split off administrativelty from the rest of the group, the paper said.
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