Dec 2, 2009

Dubai World announces restructuring plans



Dubai World has unveiled details of a restructuring plan that would include its main property firms but leave other companies untouched in a move covering $26 billion in debt that could include asset sales.
"The total value of debt carried by the companies subject to the restructuring process amounts to approximately $26 billion, of which approximately $6 billion relates to the Nakheel sukuk (Islamic bonds)," a company statement said.
The holding company said that restructuring efforts would include Nakheel, builder of Dubai's palm-shaped islands, and property firm Limitless World. "Initial discussions have commenced with the banks of Dubai World and are proceeding on a constructive basis," it said.
The efforts would not include other firms, which it said were financially stable, such as Infinity World Holding, Istithmar World and Ports & Free Zone World, which includes DP World, Economic Zones World, P&O Ferries and Jebel Ali Free Zone, or JAFZA.
Nakheel, the statement said, requested that its sukuk holders appoint a representative for negotiations.
Dubai on November 25 said it would ask creditors of Dubai World and Nakheel to agree to a standstill on billions of dollars of debt as a first step to restructuring.
"It is envisaged the restructuring process will be carried out in an equitable way for the overall benefit of all stakeholders," the Dubai World statement added.
It said this would be done in stages including: long term plans and commitment of stakeholders; determination of maintainable profit and cash generation; assessment of deleveraging options, including asset sales; assessment of funding requirements and the formulation of restructuring proposals to financial creditors.
Dubai World said Moelis & Company had been appointed to advise on the restructuring with Rothschild, who would continue its role as financial advisor.
Full text of the statement
Dubai World has unveiled details of a plan to restructure $26 billion in debt. Here is the full text of the announcement:
“Dubai World ["Dubai World"] and its subsidiaries [the "Group"] would like to update their lenders on recent developments relating to their debt obligations.
Following a detailed review of the Group's liquidity and capital structure, Dubai World has concluded that it should immediately consider alternatives in respect of the debt obligations of certain entities within the Group.
The proposed restructuring process will only relate to Dubai World and certain of its subsidiaries including; Nakheel World and Limitless World. The process will not include Infinity World Holding, Istithmar World and Ports & Free Zone World (which includes DP World, Economic Zones World, P&O Ferries and Jebel Ali Free Zone), all of which are on a stable financial footing.
The total value of debt carried by the companies subject to the restructuring process amounts to approximately US$26 billion, of which approximately US$6 billion relates to the Nakheel sukuk.
It is envisaged the restructuring process will be carried out in an equitable way for the overall benefit of all stakeholders and will comprise several phases including: long term plans and commitment of stakeholders; determination of maintainable profit and cash generation; assessment of deleveraging options, including asset sales; assessment of funding requirements and the formulation of restructuring proposals to financial creditors and their implementation.
Initial discussions have commenced with the banks of Dubai World and are proceeding on a constructive basis. In light of the current operational challenges and the future obligations of the Group, it is anticipated that the process and any related actions to address strategic alternatives will be conducted on an expedited basis.
As part of this overall process, Nakheel requests its sukuk holders to appoint an authorised representative with whom discussions can commence.
Moelis & Company have been appointed to advise on the Dubai World restructuring with Rothschild, who will continue their ongoing role as financial advisor.
Dubai World intends to adopt a policy of regular communication and will provide further updates as this process develops."

0 comments: