The crisis-hit conglomerate Dubai World has reached an in-principle agreement with most of its creditors to restructure debt worth $23.5 billion.
The Dubai government-owned entity had rattled global markets last November when it had said it wanted more time to repay $26 billion of its debts.
Dubai World on Thursday said it has reached an agreement "in principle with the coordinating committee (of creditors)... and the government of Dubai on the restructuring of $23.5-billion of total financial liabilities".
The coordinating committee represents about 60 per cent of the troubled company's bank lenders. The latest agreement, however, would require approval from its other creditors.
Once the restructuring is complete, Dubai World's financial indebtedness would come down to around $14.4 billion. The total amount would comprise "two tranches of $4.4 billion and approximately $10 billion with five and eight year maturities respectively", a company statement said.
"We are pleased that we have received a unanimous in-principle support of the coordination committee on the headline economic terms to our restructuring proposal. The proposal puts the company on a sound financial footing and reflects the continued support of the government of Dubai and its lenders," Dubai World chief restructuring officer Aidan Birkett said, announcing the deal, which was presented to the lenders on March 24.
On March 25, the conglomerate had announced that the Dubai government would be converting $8.9 billion of debt and claims into equity apart from committing to fund up to $500 million of SG&A (selling, general & administrative) expenses, among others.
Rattled by the financial meltdown and adverse economic conditions, Dubai World had decided to postpone repayment of $26 billion debt in late November last year. The plan had then sparked fears about the financial situation in the Gulf region and even threatened to derail the fragile economic recovery.
