Dubai World's Banks Expect Formal Standstill Request

Bankers expect Dubai World to make a formal request for a standstill on its $26 billion debt at Monday's creditor meeting, but it could be more than a month before banks agree, bankers said on Friday. Banks are expected to support Dubai World's request, but what happens next will depend on the information they receive about the health of its finances, as the scale and complexity of the restructuring and its political overtones put creditors in uncharted territory. "You can't bet on it, because anything could happen; it could be anything from a complete write-off to 100 percent recovery," a senior banker said. Dubai's $10 billion bailout from neighbouring Abu Dhabi, the richest of the United Arab Emirates, will be used to keep Dubai World's debt payments current, but a person with knowledge of the situation said these funds were contingent upon creditors reaching a sensible standstill agreement. The emirate's new bankruptcy law, introduced by decree this week, could provide additional incentive to strike a deal. Dubai World's meeting with a group of 90 of its lenders at 12.30pm at its offices in Dubai on Monday is expected to lead to a lengthy debt rescheduling involving extra support from Abu Dhabi or the UAE Federation, bankers said. Read more.