United Arab Emirates

Dubai Group LLC’s creditors are seeking an option to be repaid early as the investment company controlled by Dubai’s ruler reorganizes $6 billion of bank debt, according to three people familiar with the talks, Bloomberg Businessweek reported. Under the early exit proposal for the 10-year debt restructuring, banks can choose to be repaid the market value of their loans after five years, said two of the people, who asked not to be identified because the information is private.

Royal Bank of Scotland Group Plc, Commerzbank AG and Standard Bank Group Ltd may be betting Dubai will improve terms on a $10 billion debt restructuring to protect its reputation after a near default in 2009, Bloomberg Businessweek reported. The banks walked away from talks with government-owned Dubai Group after 18 months without an accord, two people familiar with the situation said July 9. The banks disagreed with demands for loan maturities of 12 years, one of the people said, asking not to be identified because the negotiations aren’t public.

Drydocks World, the shipbuilding and repair arm of Dubai World, has finally obtained the official go-ahead from creditors for its $2.2 billion debt-restructuring plan, the Khaleej Times reported. At a meeting in Dubai on Tuesday, creditors holding more than 97 per cent of the debt to be restructured officially agreed to the deal, a statement from professional services firm of PricewaterhouseCoopers, or PwC, said. PwC is advising Drydocks on the restructuring alongside law firm Clifford Chance.

Royal Bank of Scotland and two other banks have abandoned talks on restructuring Dubai Group’s $10bn debt and threatened to bring unprecedented legal action against the investment vehicle of Dubai’s ruler, sources close to the matter said, Gulf Times reported on a Reuters story. The walkout by RBS, German lender Commerzbank and South Africa’s Standard Bank at the beginning of June could prevent a deal for the entire restructuring just as an initial agreement is about to be circulated to other banks, five sources said.

Dubai's shipyard operator Drydocks World signed a deal Wednesday to form a joint venture for its Asian operations with Singapore's Kuok Group as it tries to close a $2.2 billion debt restructuring, The Seattle Times reported on an Associated Press story. The debt-laden shipbuilder has been working on the deal since at least December, when chairman Khamis Juma Buamim first discussed the possibility of sharing control of its Asian businesses. Its parent company, Dubai World, sent markets reeling in 2009 when it acknowledged it couldn't pay back billions it owed.

The United Arab Emirates is close to finalising an updated federal bankruptcy law and a draft of the legislation should be ready by the end of this year, Justice Minister Hadef bin Juan al-Dhaheri said on Monday, Reuters reported. The draft, which has been in the works since 2009, should enable both listed and family-owned companies in the UAE to be rescued rather than having to go through lengthy bankruptcy or liquidation proceedings. "The ministry is studying a set of laws," Dhaheri told a conference on financial restructuring and bankruptcy in Dubai.

Dubai Legal proceedings in the $2.2 billion (Dh8.08 billion) debt restructuring of Dubai World's shipbuilding unit have been delayed due to a court challenge in Singapore over a rig-building contract, a lawyer said yesterday, gulfnews.com reported. Drydocks World sought insolvency protection last month and is using a special tribunal in Dubai to force creditors to sign up to the plan. It also filed legal proceedings in Singapore to push through the proposal.

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.