With the threat of a multinational battle over the US$3.5 billion (Dh12.85bn) bond of its development subsidiary behind it and a new tribunal created specifically to referee its negotiations with creditors, Dubai World now embarks on the painstaking task of restructuring another $22bn in debt.
The process will undoubtedly involve more painful cuts at the company, which has already announced plans to lay off 12,000 employees and will involve selling off assets not essential to its core business to raise cash, even if it means selling them at a loss.
But it will also mean asking creditors to ease its debt burden, extending payment terms and even forgiving debts. If they prove unwilling, Dubai World can now seek the protection of the new tribunal, giving it up to 10 months, and perhaps more, to negotiate with lenders.
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