Government-owned Dubai World will not default on its restructured $24.9bn in debt and is able to meet its credit obligations, the company’s chairman has said.
“Whatever [commitment] we have at the end of the day, we are committed to do it, and we will do it,” Sheikh Ahmed bin Saeed Al Maktoum told newswire Zawya Dow Jones.
“I don't think we can afford today, if we have anything, to default on it. It is a matter of credibility and am sure we will be able to demonstrate this in the coming years.”
DW signed a final deal in March this year with all of its 80 creditors to restructure nearly $24.9b in debt, having announced in November 2009 its standstill decision on what was $23.8b of debt at that time.
Although DW had said previously that it may sell some of its assets, Sheikh Ahmed clarified that the conglomerate was in no rush to do so, and would in fact wait for the right time for any asset sale.
“When they tell me you have to sell this [asset] and you have to sell that, I don’t have to sell it today...if there is something I have and I want to sell in 2 to 8 years, I will try to clean up the business, to make those companies look good, perform good and that is one way of getting much better price for it,” said Sheikh Ahmed.
According to the statement issued to announce the final signing of the DW debt restructuring accord, the value of DW assets in various parts of the world have recorded very good growth over the past few months, benefiting from the relatively improved global economic environment and improved investor sentiment.
Under the terms of the two-tranche debt repayment plan, DW creditors will receive $4.4b over five years in the first phase while the second tranche will involve $10.3b over eight years at a fixed interest rate of 2.4 per cent. The amount includes debt held by the banks while the remaining debt is held by the Dubai government.
DW’s current portfolio includes luxury retailer Barney’s New York, a stable of high-end US hotels, and stakes in Las Vegas casino operator MGM Mirage and Cirque du Soleil. At home in Dubai, the company’s property arm Nakheel built man-made islands in the shape of palm trees and a map of the world. The company also owns the iconic British cruise liner Queen Elizabeth 2, with plans to turn it into a floating hotel.