North Africa/Middle East

Dubai Group LLC, the investment company owned by the emirate’s ruler, proposed paying interest of 1 percent to 2.5 percent in a $6 billion debt restructuring proposal, three people familiar with the plan said, Bloomberg reported. Four different interest rate classes have been proposed depending on the currency and the type of creditors, two people said, declining to be identified because the information is private. Secured creditors, whose loans are backed by assets, will be repaid principal in three years, according to the people.

Dubai Holding, an investment vehicle owned by the emirate's ruler, said Thursday its private equity arm Dubai International Capital has reached an agreement with lenders on a $2.5 billion debt deal, while it is confident that the Dubai Group restructuring will be concluded successfully, The Wall Street Journal reported. Under the terms of the DIC restructuring, lenders will extend $2.15 billion of the debt for five years and receive a 2% cash interest coupon, according to a Dubai Holding statement.

Drydocks World, a Dubai-based shipbuilding and repair company, is threatening to seek a legal ruling from a special tribunal here to overcome lenders' opposition to its $2.2 billion debt-restructuring plan, according to people familiar with the matter, The Wall Street Journal reported. Drydocks may apply as soon as Monday to the Dubai World Tribunal seeking legal backing for its debt-restructuring plan, which has been approved by the majority of Drydocks' lenders but is still being opposed by a few creditors including a number of hedge funds, according to two of the people.

Abu Dhabi has discussed a £10bn investment into Royal Bank of Scotland, as part of a complex transaction that would help pave the way for the government’s eventual exit, the Financial Times reported. The investment has been debated in the course of long-running talks between UK government officials and potential investors in both RBS and Lloyds, Britain’s two big part-nationalised banks. The discussions have taken place at regular intervals over the past three years, according to people close to the discussions.

DP World, the Dubai government-controlled port operator, said Monday it will reach into its cash reserves to pay back $3 billion in debt half a year early, the Associated Press reported. The move will shrink the company's debt load by nearly 40 percent while still leaving it with more than $1 billion in cash on hand, according to company figures. DP World's ability to borrow billions to fund an aggressive overseas expansion helped it become the world's third largest port operator.

Bahraini investment house Arcapita's move to file for bankruptcy protection in the United States, while a milestone for debt restructuring in the Gulf, is unlikely to prompt other regional firms to follow suit, Reuters reported. Arcapita became the first Gulf Arab firm to file for Chapter 11 in the U.S. on Monday, under pressure from hedge funds which demanded full repayment ahead of the maturity of a $1.1 billion Islamic finance facility on March 28.

Arcapita Bank, a Bahraini investment firm heavily invested in the United States and Europe, said Monday it has filed for U.S. bankruptcy protection in a bid to reorganize the company, the Associated Press reported. The firm, whose investments include U.S. women's apparel retailer J. Jill and British rail company Freightliner, sought Chapter 11 protection after failing to refinance a $1.1 billion loan due on March 28. It said it is using the filing as a way to protect its assets while it works out a turnaround plan. None of the companies Arcapita owns is included in the filing.

Drydocks World LLC, the Middle East’s biggest ship repair company, said it’s proposing to repay loans over five years as part of a plan to restructure $2.2 billion of debt, Bloomberg reported. Drydocks World presented the terms of its proposal and the steps required to implement it along with the associated timeline to all its syndicated lenders in Dubai today. The company said it’s confident it can get support for the plan.

Drydocks World LLC plans to present next week the terms to restructure $2.2 billion of debt as the global credit crisis forces Dubai’s state-linked companies to alter terms on loan repayments, Bloomberg reported. Drydocks World, a unit of state-controlled Dubai World, will on March 8 “present the terms of its proposal and the steps required to implement it along with the associated timeline to all its syndicated lenders,” the company said in an e-mailed statement today.

More than two years after the Dubai debt crisis erupted, the restructuring of corporate debts remains in legal limbo as it is unclear how banks can get back their money from government-linked enterprises in the Gulf state, Reuters reported. The impasse, which is aggravated by deficient bankruptcy legislation, is finally pushing some banks to lose patience and consider legal action. But their tougher stance is being matched by a hardening of the government's attitude to bailing out state-linked entities, raising the risk of further delays in completing these restructurings.