North Africa/Middle East

A potential $2.2 billion debt restructuring for Drydocks World, the shipbuilding arm of indebted Dubai World, is seen facing tough headwinds with the presence of hedge funds and a lack of government aid seen threatening an amicable deal, Reuters reported. Drydocks has set up a committee to thrash out an agreement for the restructuring of its $2.2 billion debt pile. The firm missed a payment deadline for a $1.7 billion three-year loan facility that it took in October 2008. It also has another five-year $500 million facility on the restructuring table.

The UAE is in the final stages of framing regulations on insolvency, foreign investment and arbitration, Dr Hadef Bin Jua'an Al Daheri, the UAE Minister of Justice, has told Gulf News. Speaking ahead of the International Bar Association Annual Conference (IBA), which opened in Dubai yesterday, Al Daheri said that the UAE's legal environment has become a role model for the region. "There are some laws that are under study and these include the arbitration law, the foreign investment law and the insolvency law, as well as others.

State-owned Kuwait Airways has delayed plans to privatize the airline and will now push ahead with a restructuring of the ailing carrier, a committee formed for the privatization process said, Reuters reported. The national carrier, which was established in 1954, has been struggling to cut losses and increase revenues amid rising competition from other regional carriers like Dubai's Emirates and Abu Dhabi's Eithad Airways.

Two years after the Dubai debt crisis erupted, contributing to a wave of loan restructurings across the Gulf, those restructurings may be entering a more difficult phase as banks become reluctant to extend maturities further, the Kuwait Times reported. Government-related and private companies in the region have so far avoided defaults by agreeing with creditors to push out maturities-a process labelled "extend and pretend" by some cynical bankers. This method has helped banks avoid billions of dollars in writedowns and companies to avoid the shame of defaulting.

The shipbuilding division of troubled state conglomerate Dubai World said Tuesday it is determined to hammer out a $2.2 billion debt restructuring deal, despite a legal challenge from one of its creditors, CanadianBusiness.com reported on an Associated Press story. The unit, known as DryDocks World, gave no indication when it expected the restructuring to be completed. It has been in talks with lenders for months to retool the terms of the loans, which were excluded from its parent company's own high-profile debt talks.

Local banks in Dubai have sufficient liquidity to weather a global downturn, the chairman of the Gulf Arab's largest bank and a key figure in its recovery from a 2009 debt crisis said on Monday, Reuters reported. Sheikh Ahmed bin Saeed al-Maktoum, who is also chairman of Dubai's Supreme Fiscal Committee, also said some local firms still had a way to go to rebound from Dubai's debt crunch. A deepening debt crisis in Europe as well as a slowdown in the United States have increased odds for another global recession this year.

Dubai has completed the "major bulk" of its debt restructuring and is comfortable in its ability to tap bond markets when it deems it necessary, a top Dubai official said Thursday, Dow Jones reported.

Kuwait's Global Investment House requested its creditors Thursday to delay repayment of debt due in December citing ongoing challenges in the financial markets, Agence France-Presse reported. "Global requested the lending banks’ support for the near-term deferral of principal repayments due in December 2011 and deferral of any increase in rate of interest from December 2011 onwards," the company said following a meeting with creditors. Under a restructuring plan signed in December 2009, Global was expected to repay more than $340 million of debt plus interest.

Dubai developer Nakheel , which completed a complex debt restructuring last month, wrote off up to 78.6 billion dirhams ($21.4 billion) of its real estate assets due to a property crisis in the emirate, according to a bond prospectus, Reuters reported. Nakheel, which overstretched itself building islands in the shape of palms and other ambitious projects, incurred impairments of 73.8 billion dirhams in 2009, primarily related to the carrying value of assets and capital work in progress.

Al Jaber Group yesterday held talks with its banks over a debt standstill agreement as the family conglomerate, based in Abu Dhabi, seeks to delay repayments as part of a wider restructuring of the group, The National reported. At a meeting in Abu Dhabi, Al Jaber Group, which has interests in property, manufacturing and aviation, submitted a draft standstill agreement and a business proposal to banks involved in its debt restructuring talks, said one person close to the company who asked not to be identified. "We're at a very early stage," the source said.