Dubai's $26bn Debt Restructure Plan Raises Concern
December 02, 2009 2:48 PM
Dubai is struggling under more than $80bn of debt. Many investors believe the Emirate which has meagre oil resources, will be dependent on federal support and bankrolled by Abu Dhabi, the UAE’s wealthy capital.
Sheikh Mohammed bin Rashid al-Maktoum, Dubai’s ruler, assured investors on Tuesday that his debt-laden Emirate’s economy is sound.In his first public statement since Dubai World requested a standstill on debt of $26bn for six months, he said UAE economy has become stronger and more cohesive.
Worried banks and hedge funds are however forming a representative group fearing prospects of a broader restructuring. Nakheel’s bond holders have formed an ad-hoc group, which has appointed a law firm Ashurst to advise in talks with the borrowers.
RBS(NYSE: RBS), Standard Chartered, HSBC(NYSE: HTB), Lloyds(NYSE: LYG) and two UAE banks have formed a steering committee under the aegis of KPMG to represent creditors of Dubai World. Dubai World said its restructuring would involve $26bn of debt.
