Dubai World urges creditors to accept restructuring

Dubai World, which is one of the emirate's biggest business groups, held a meeting of creditors yesterday at the Atlantis Hotel on the Palm Jumeirah, to explain the restructuring process.

The creditors were told that an independent tribunal was being set up to hear their grievances, but also to persuade them to accept the terms of the restructuring which includes extending the debt maturities to between five and eight years.

In May, Dubai World agreed the terms with a co-ordinating committee of seven leading creditor banks, chaired by the Royal Bank of Scotland. The banks on the committee hold around 60pc of the company's debt.

The rest of the debt is owned by 73 banks, many of which sent representatives to the meeting yesterday. Dubai World said the meeting was informal and no resolution was reached. The group hopes to have an agreement in place by the autumn.

Sir Anthony Evans, a British judge who is Chief Justice of the Dubai International Financial Centre Courts, has been appointed to the special tribunal. The judge, who formerly sat on the Commercial Court of the High Court of Justice in the UK, will listen to creditors views but will ultimately be tasked with getting the agreement through.

The creditors were also told that Dubai World would seek to sell assets to fund the debt repayment. However, the company insisted that the terms of the restructuring would mean that it could wait to sell assets at the best time rather than start a fire-sale. The process of selling assets has already started with the potential off-loading of Inchcape Shipping Services, a port and shipping agent.

In November, Dubai World, which owns Dubai Ports, the owners of P&O, and Nakheel, the property arm, shocked global markets by asking for a "stand-still" agreement on its large parts of its $60bn debts.