Dubai World says it’s close to agreement on debt

In November,the Dubai government set off a global wave of investor panic after it told its creditors that it would delay interest payments on the debt that Dubai World owed. In May,Dubai World struck a preliminary deal with the majority of its lenders to repay $14.4 billion in debt within eight years,while the government of Dubai agreed to convert almost $9 billion worth of loans into equity.

At the time,the company reached a tentative agreement on the broad outline of the restructuring with a coordinating committee representing about 90 lenders. Since then,it has completed the details in negotiations that have taken a relatively brief time,given the size of the debt.

Dubai World’s liabilities of $24.9 billion have risen from the $23.5 billion announced in May and include accrued interest and additional contingent claims,the government said. While Dubai World might sell assets to meet its new obligations,the longer debt maturities could give the company time to stabilise,as its assets’ values recover.