Report: Creditors reject Dubai World’s offer

16 Apr 2010

(MENAFN) Creditors have rejected Dubai World’s offer of a 1 percent interest rate on two new tranches of debt as part of its restructuring plan, saying that the rate is too low, Reuters reported.

Last month, Dubai proposed the restructuring plan to creditors, asked for a delay in repayment of the conglomerate’s debt in November, and said the deal was conditional upon agreement with the creditors.

Dubai World’s proposal would give bank creditors new debt covering the $14.2 billion they are owed over 5 to 8 years, and repay in full property unit Nakheel’s 2010 and 2011 bonds.

Reuters reported that Dubai World’s proposal of the 1 percent rate on the new debt was rejected by creditors, who countered the offer with one at market rate, which they estimated to be nearly 5 percent. However, negotiations are continuing.

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