DUBAI: State-linked indebted conglomerate Dubai World intends to ask creditors for a six-month standstill on $22 billion in debt this month, until it completes restructuring, an Arabic-language daily said on Wednesday.
According to a report published in the Al-Ittihad newspaper, Dubai World will request a debt freeze from the end of February, which would cover a bond repayment of $980 million from property unit Nakheel. A spokesman for Dubai World said the company has not released a statement on a standstill and declined to comment further.
Dubai World rocked global markets last year after it said it would request a standstill on billions in debt repayments at its two property units, Nakheel — developer of the emirate’s palm-shaped islands — and Limitless World.
“This important step by Dubai World this month will represent the most significant transitional phase in the group’s negotiations with creditors,” sources told the paper.
A last minute intervention from wealthy neighbor Abu Dhabi staved off a default on a major Nakheel bond payment on Dec. 14, but further financial help is conditional upon a standstill agreement.
Dubai World has access to about $4.9 billion remaining of the funds provided by Abu Dhabi, and the financial support will cover working capital and interest expenses, while a restructuring plan is hammered out.
