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Dubai World’s Revised Offer Leaves Lenders Dissatisfied

Dubai : 01 May 2010

At present the Dubai World talks are still ongoing with the latest news indicating that they have now made a revised offer to lenders. However the banks involved still remain largely dissatisfied with the terms being offered analysts are stating.

The offer at present is for a 1% interest rate and another 1% of payment in kind which added after the initial offer in an effort to entice creditors to accept the terms however it is still likely to be rejected again. The Dubai Government didn’t comment on the current offer but stated that the plan does incorporate a cash interest payment as well as a payment in kind.

At present Dubai World are still haggling with seven banks who compose more than 95% of the current debt outstanding. It is likely that a 2% interest on debts may soon be put on the table but it is not likely that the lending institutions involved will be overjoyed with this offer either. Analysts are saying that this is still asking the banks to absorb huge losses from the entire Dubai World debacle.

Nakheel’s creditors are currently being offered a 40% cash repayment and a 60% sukuk repayment, which will include a 10% annual return rate. At present it is difficult to predict what the final outcome is likely to be.

Paul Holdsworth, Staff Writer, Gulf Jobs Market News
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