Dubai World, creditor banks agree in principle on debt deal

A view of high rise buildings is seen in Dubai March 23, 2010. (Xinhua/Reuters Photo)

Indebted state-owned conglomerate Dubai World and its creditor banks have agreed in principle on a deal to settle outstanding liabilities, the company said Thursday.

Dubai World said in a statement that it was pleased to announce that "headline economic terms" have been agreed in principle with a committee, which represents the company's financial creditors, and the Dubai government on the restructuring of 23.5 billion U.S. dollars of total financial liabilities, according to the website of Arabian Business, a local business journal.

The committee accounts for approximately 60 percent of the bank lenders, the statement said.

"Since Dubai World presented its restructuring proposal... the company and the committee have been engaged in constructive discussions," it said.

"Following these discussions, the proposal has been refined to provide options that better accommodate the needs of our large and diverse lending group," the statement added.

Aidan Birkett, chief restructuring officer of Dubai World, described the agreement as "an important milestone," saying it reflected the company's efforts to achieve the best possible solution for all stakeholders.

"The proposal puts the company on a sound financial footing and reflects the continued support of the government of Dubai and its lenders. It offers the company the ability to maximize the value of its assets over the medium to long term," he was quoted as saying.

Last November, Dubai World sent shockwaves across financial markets when it said it would not be able to repay its debts on time and asked for a six-month freeze on debt payments.

The Dubai government said in March that it would offer 9.5 billion dollars in aid to the troubled conglomerate as part of a restructuring plan.

Source:Xinhua