Top Dubai officials have been in talks with creditors in London on the possible repayment of all the banking debt owed by the troubled subsidiaries of the Dubai World group, a newspaper said on Sunday.
“The possibility of repaying all bank loans in full was discussed as a medium-term possibility” in the talks held between the delegation and financial leaders in London, The National said, quoting participants.
Dubai sent its ruler’s uncle, Sheikh Ahmed bin Saeed al-Maktoum, who heads its Supreme Financial Committee, and his deputy Mohammed al-Shaibani, to London to discuss Dubai World’s debt problems, after asking last month for a six-month freeze on payments to allow parts of the group to be restructured.
“They made clear there were a number of options the government of Dubai saw as feasible and desirable for Dubai World and repayment in full was one of them,” said one participant, who requested anonymity.
The total outstanding debts of Dubai World subsidiaries that are to be restructured amount to 22 billion dollars after its property subsidiary Nakheel arranged to pay 4.1 billion dollars in bonds which matured last week.
Bank loans are estimated to amount to more than half that value, with British banks’ exposure believed to be more than five billion dollars.
Representatives of the lenders and Dubai World are due to meet on Monday in Dubai in the first formal session of talks aimed at resolving the company?s debt position, the Emirati newspaper said.
Dubai surprised world financial markets last week when it issued a last-minute announcement saying it will repay Nakheel’s maturing debt on time, defusing a crisis that raised fears over the emirate’s ability to pay debts.
The imminent debt was covered by a 10-billion-dollar bailout extended by Abu Dhabi, bringing to 15 billion dollars the oil-rich neighbour’s financial contribution towards sorting out Dubai’s debt problem.
The Abu Dhabi-based central bank of the United Arab Emirates also paid Dubai 10 billion dollars in February to help cover its debts after Dubai was hit by the global financial crisis.
Dubai’s total debt is estimated at between 80 and 100 billion dollars, with Dubai World’s debt amounting to 59 billion dollars.