Dubai’s government is preparing a campaign to persuade the holders of a bond due for repayment next month to agree to a delay even if that sparks claims that the emirate has defaulted on the debts of a government-backed company, bankers said on Sunday.
Pushing aside concerns about potential legal action, the department of finance is preparing to communicate with the public and with the bondholders of an upcoming $4bn sukuk, or Islamic bond, issued by Nakheel, a major real estate developer, via the new chief restructuring officer of Dubai World, Nakheel’s parent.
It needs to gain the agreement of the holders of three-quarters of the bond’s value. Dubai will also start a press campaign headed by senior members of the supreme fiscal committee and department of finance, according to people familar with the situation.
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