State-owned conglomerate, Dubai World, is to meet with creditors today to discuss its debt repayment plan.
The company owes $59 billion of the country’s entire $80 billion debt mountain and is in need of restructuring.
This morning, the Dubai Financial Market lost 1.75% as the debt-laden conglomerate commenced talks with over 90 banks to secure agreement for a six-month holiday of all repayments on its $22 billion debts.
Creditors include executives from HSBC and Royal Bank of Scotland.
When details of Dubai’s debt crisis unfolded, shares plummeted worldwide and in particular, London, when it emerged that UK banks hadlent over an £30 billion to the United Arab Emirates as a whole - the majority of which went to Dubai.
The talks which commence today at the Dubai World Trade Centre are the first official talks between Dubai World and all its creditors since the company requested the repayment holiday at the end of November.
According to leading creditors, a standstill on repayments is expected to be agreed but negotiations are expected to be lengthy.
“Providing clarity is clearly the number one priority,” said Raj Madha, banking analyst at EFG-Hermes. “Obviously a standstill is not ideal. But a standstill with visibility of when payments will be received or the extent of these payments would be sufficient to call it a result.”
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