Dubai World says restructuring involves $26 bn debt

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Dubai World unveiled details of a restructuring plan on Monday 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 government-controlled holding company, at the centre of an estimated $59 billion debt storm, 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 rocked the financial world on Nov. 25 when it said it would ask creditors of Dubai World, the conglomerate behind its rapid expansion, and Nakheel, builder of its palm-shaped islands, to agree to a standstill on billions of dollars of debt as a first step to restructuring.

Earlier on Monday, the Dubai government disclaimed responsibility for the debts of its Dubai World conglomerate, crushing earlier assumptions by creditors that the Gulf emirate would guarantee its liabilities.

"It is envisaged the restructuring process will be carried out in an equitable way for the overall benefit of all stakeholders," the 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.