Dubai World Submits $23B Restructuring Plan

The proposed restructuring requires the agreement of Dubai World's creditors, which the company said it will work to secure in the coming weeks. "This proposal represents the best possible solution for all stakeholders," said Aidan Birkett, chief restructuring officer, in a statement. "It follows extensive discussions with our creditors, a thorough review of Dubai World's businesses and significant financial support from the government. It offers the company a strong future and the opportunity to maximize the value of its assets over the medium to long term."

The government, acting through the support fund, is proposing to convert $8.9 billion of debt and claims, representing 38% of the total amount of standalone debt and guarantees of Dubai World, into equity, subordinating its claims to other creditors. In addition, the fund will commit to fund up to $1.5 billion of cash into Dubai World to fund the company's working capital and interest-payment commitments that will arise from the new debt facilities. Non-fund creditors will receive 100% principal repayment through the issuance of two tranches of new debt with five- and eight-year maturities.

Nakheel, Dubai World's property entity, has also detailed its restructuring plan of its debt and liabilities. The plan enables Nakheel to offer creditors 100% of agreed amounts owed and to fulfill its obligations to customers through the prompt completion of near term projects.

The government, through the support fund, will commit to providing approximately $8 billion of new money directly to Nakheel to fund operations and settle liabilities. In addition, the fund has proposed to convert its existing $1.2-billion debt claim in Nakheel into equity.