Dubai World said Thursday it has reached a deal "in principle" with a majority of its creditors on the company's $23.5 billion restructuring plan.
The indebted state company — at the center of Dubai's overall immense debt pile — said a coordinating committee representing about 60 percent of its lenders had signed off in broad terms to the proposal. It still needs to win the backing of its other financial creditors before the plan takes effect.
Aidan Birkett, Dubai World's chief restructuring officer, who was brought in to help the company sort out its massive debt load, said the company was happy to win what he said was the committee's "unanimous support in principle" for the plan.
"This is an important milestone and reflects our efforts to achieve the best possible solution for all stakeholders," he said in a statement. "The proposal puts the company on a sound financial footing and reflects the continued support of the government of Dubai and its lenders."
Dubai's government outlined its long-awaited restructuring plan in late March, but the deal still needed approval from a broad array of international and local banks owed money by the company. Among the committee's members are HSBC Holdings PLC, Royal Bank of Scotland Group PLC and Standard Chartered PLC.
If the restructuring plan moves ahead, Dubai World said it will carry about $14.4 billion in bank debt.
Some $4.4 billion worth of the debt is scheduled to be repaid within five years. The remaining $10 billion will have an eight-year repayment period.
As part of the proposal outlined in March, Dubai's government — the full owner of the conglomerate — agreed to offer as equity an $8.9 billion claim in the company, while also pumping in up to $1.5 billion in new funds.
Dubai World said Thursday the fundamentals of its plan have not changed from what was put on the table in March. It reiterated that "no additional financial support" would be forthcoming from Dubai's government.
The International Monetary Fund estimates the emirate of Dubai is shouldering as much as $109 billion in debt.
Dubai World, the emirate's chief engine for growth and which includes island-building developer Nakheel, has interests in a broad range of businesses, including seaports, real estate and retail.
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