North Africa/Middle East

Royal Bank of Scotland chief executive Stephen Hester has joined other creditors in lending his support to the $9.5 billion (£6.3 billion) restructuring of Dubai World, The Scotsman reported. Hester told regional newspaper Gulf News that the plan has sent out the "right signals". RBS was among the seven-member panel which held negotiations between the conglomerate and its other creditors, which total more than 90. Hester's comments come a day after two other creditors, HSBC and Abu Dhabi Commercial Bank, lent their approval to the plan.
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The mayor and city treasurer of the western Negev city of Sderot say their town is tottering on the brink of bankruptcy, Haaretz.com reported. Treasurer Shimon Peretz says that the cumulative deficit of the municipality stands at NIS 28 million. Mayor David Buskila and Peretz claim that the deficit is the result of the cessation in the flow of charitable donations to the municipality, which ceased with the flow of thousands of Qassam rockets which rained down from nearby Gaza for years.
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UAE banks are likely to keep a tight lid on lending in coming years, even if the sector manages to avoid an immediate hit from the Dubai World debt restructuring, analysts say. The state-owned conglomerate, which is grappling with $26 billion in debt, is in the final stages of preparing a debt restructuring plan to put to its 97 creditors. Analysts have voiced concerns that domestic lending would dry up if banks are forced to take big losses on Dubai World-related debt.
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STX Group, one of the nation's leading shipbuilders, has joined the competition to take over Daehan Shipbuilding, The Korea Times reported. The company said Wednesday it had submitted a bid to buy the cash-strapped firm the previous day, the closing day for the tender. Daehan Shipbuilding, now under a debt rescheduling program, has a 140,000 square-meter dock in Haenam, South Jeolla Province.
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Dubai World will present a proposal to creditors in March to restructure about $22 billion of debt after its advisers complete valuing the assets of the state- owned company, a person close to the Dubai government said, BusinessWeek reported. The final proposal will be made after consultations with the Abu Dhabi government and the United Arab Emirates’ central bank, said the official today, who declined to be identified because the process is private.
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Dubai's $10 billion aid from Abu Dhabi in December, which helped the emirate avoid default on a state-linked developer's bond, included $5 billion previously lent by two Abu Dhabi banks, a Dubai government spokeswoman said on Monday, Reuters reported. It had been unclear whether Abu Dhabi's $10 billion lifeline on December 14 -- which enabled Dubai World to repay a $4.1 billion Islamic bond, or sukuk by developer Nakheel -- was entirely new money or included the bond to Abu Dhabi-controlled banks.
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Germany's Blue Wings is looking for funds following a dispute with shareholder Alexander Lebedev, as financial problems led regulators to ban the Duesseldorf-based airline from flying, Reuters reported. The carrier halted flights earlier on Wednesday, mere hours before German aviation authorities revoked its operating license for the time being, according to a spokesman for the company. Blue Wings' financial woes, which have left its staff without pay since mid-November, stem from a lack of financing from shareholders, the spokesman said.
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It was heralded as Dubai's crowning achievement but the cash-strapped emirate was forced to swallow its pride today and rename the world's tallest building after its financial rescuer - the ruler of its oil-rich neighbour, The Australian reported. The humiliating announcement was made by Dubai’s own leader at the dazzling launch of the $1.5 billion Burj Dubai, which will now be known as Burj Khalifa in honour of Sheikh Khalifa bin Zayed bin Sultan al-Nahyan, President of the United Arab Emirates.
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Dubai must raise funds to feed its mushrooming debt but the Gulf emirate dreads imposing taxes to avoid breaking a business model that helped turn it from a lazy fishing town to a regional trade and tourism hub, Reuters reported. Selling some prized assets appears to be an easier option. Dubai, one of seven members of the United Arab Emirates federation, and state-linked firms owe an estimated $80 billion of debt borrowed to fuel a boom, when Dubai branded itself as a tax-free destination for foreign workers and businesses.
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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.
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