Dubai World guarantees revealed

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Dubai has offered Dubai World creditors some guarantees on rescheduled loan repayments in an additional concession that the government says illustrates the generosity of last week’s proposal to inject $9.5bn to help restructure the ailing conglomerate.

Since the tabling of the $24.8bn restructuring proposal, some creditors
to the state-owned conglomerate have complained about sub-commercial interest payments and preferential treatment for bondholders and financial creditors of Dubai World’s development arm Nakheel, which forms the lion’s share of the restructuring.

A person close to the government rejected these complaints, arguing that Dubai World’s unsecured creditors, which are owed as much as $14.2bn, received the best deal they could expect given others made loans on a secured basis.