Dubai World Nears Debt Restructuring Agreement

Dubai World, the troubled investment company based out of the United Arab Emirates said that they had reached an agreement with nearly all of their creditors on Friday on a plan to restructure $24.9 billion in debt. The company, owned by the state of Dubai, believes that it should be able to finalize the plan within weeks, with 99% of their creditors on board, according to Dubai World. The company has had the support of seven of their core lenders on board since May, but the challenge has been getting smaller banks on board. Overall, 73 creditor banks have been in negotiations since the proposal was first outlined back in March. Core lenders include the Royal Bank of Scotland

, Lloyds Banking Group

, and local banks Abu Dhabi Commercial Bank, and Emirates NBD. The debt being restructured was boosted from a $23.5 billion estimate due to interest payments and other miscellaneous costs. However, Dubai World’s proposal will offer lenders full repayment on the debt principal within 5-8 years. The International Monetary Fund estimates that Dubai and their state companies, including Dubai World, hold as much as $109 billion in debt.