DP World in $14.6bn Debt Scheme


An agreement has been reached by Dubai World, the company which owns a majority stake in port operator DP World, and creditors to amend and extend the terms of around US$14.6 billion of company debt that was incurred during the financial crisis of 2009.

The deal involves an extension of debt repayments due in 2018 to 2022 as well as the repayment of $2.92 billion due in 2015, according to Bloomberg.

Dubai World signed a deal with around 80 creditors in March, 2011 that would see it paying 2.4% interest on debt repayments.

Banks including HSBC Holdings Plc, the Royal Bank of Scotland Group, and Standard Chartered Plc are among the company’s biggest creditors.

DP World in $14.6bn Debt Scheme. (Source: Arabian Business)

Richard Segal, Head of Emerging-Markets Credit Strategy at Jefferies International, said: “This is good news for Dubai, Dubai World and its creditors as it eliminates the uncertainty around the situation”, adding that the deal was “…a long-time coming but few details have been released so its difficult to tell what’s on the table and whether it’s better or worse than expected.”

Through a special tribunal relating to Dubai World, the holding company plans to seek court approval for the agreement through a Decree 57 process.

The decree requires that at least 66.67% of creditors approve the deal, with Dubai World saying it has already exceeded that threshold.

Dubai World said that the agreement: “Represents a ‘win-win’ for the company and lenders, providing an improvement on the existing credit agreements for both sides.”  

The Decree 57 process may take several months to complete.

DP World in $14.6bn Debt Scheme. (Source: Construction Week Online)

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