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Dubai World gets $9.5 billion lifeline
The Dubai government has announced it will provide $9.5 billion in funding to help the troubled Dubai World restructure its debt.
March 25, 2010 9:34 by Ben Flanagan
The Dubai government has announced it will provide $9.5 billion in funding to help the Dubai World investment vehicle restructure its debt.
The troubled company has presented a plan to restructure $23.5 billion of debt to its creditors, including converting $8.9bn of debt into equity. Creditors, meeting this week in Dubai, will now decide on whether to accept the plan.
The proposed package “includes a commitment to fund up to $9.5 billion in new funding,” said Sheikh Ahmad Bin Saeed Al Maktoum, chairman of the Dubai Supreme Fiscal Committee, in a statement issued today.
“This will be funded by $5.7 billion remaining from the loan previously made available from the Government of Abu Dhabi and from internal Dubai Government resources,” he added.
“Dubai World has been in discussion with lenders and will present a proposal to all its creditors for the restructuring of their loans. In this proposal the Government is offering to recapitalise Dubai World through the equitisation of the Government’s $8.9 billion claim and a commitment to fund up to $1.5 billion in new funds.”
The new funds will be issed by the Dubai government of Dubai, acting through the Dubai Financial Support Fund.