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Hope on The Horizon for Dubai World Debt

Dubai, United Arab Emirates : 03 May 2010

Simon Cooper, a senior executive for HSBC, one of Dubai World’s major creditors, stated today that after the most recent debt repayment proposal there might be only weeks to an agreement between lenders and creditors.

Mr Cooper was confident that there would be “no reason why” the proposal would not be signed “in a few weeks”, as he thought it was “very fair” and a “good way forward” for the Emirates.

HSBC is one of a panel of seven members, comprising of five foreign banks and two local ones, which represent the bulk of Dubai World’s creditors.

In March this year the Dubai government announced its rescue strategy for the company to the tune of some $9.5billion, in the hopes that this would enable the troubled company, which has over one hundred creditors, to haul itself out of the mire.  But until very recently it seemed agreement on the debt repayment was a long way away with offers of a 1% interest rate, with two tranches of debt, which were to be repaid over a five to eight years, receiving a very lukewarm reception.

The news that an agreement might now be on the horizon has seen UAE shares advance, with Union Properties, one of the biggest developers in Dubai, seeing its profit in the first quarter rise 67 percent.

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