Four options before Dubai to repay debt

Debt-ridden Dubai World is mulling over four options to repay its $59 billion credit and liabilities,media here reported....

Debt-ridden Dubai World is mulling over four options to repay its $59 billion credit and liabilities,media here reported. One of the options being considered by advisers to the conglomerate,is the on-schedule (December 14) repayment of the $4 billion payment of a sukuk (Islamic bonds) from Nakheel(real estate arm),the National said.

Dubai World seeking an extension to repay its multi-billion debt till May 2010 has sent world stocks on a tailspin and has raised alarms in the financial world. If Dubai World pays back the sukuk (the Islamic bonds),it would solve a problem for the company and its bondholders,and leave open the option of rescheduling bank debt and other liabilities,including bills owed to international contractors, the daily said.

The other options being considered include a scheme to offer bond holders 80 per cent redemption of the value of their holdings,with a similar offer being made to bankers. Alternatively,Dubai World may move forward with the plan to seek a general debt holiday under the terms of last weeks standstill proposal,by which payments would be frozen until May 30 next year.

Lastly,Dubai World might embark on a general

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liquidation of assets in response to legal action by creditors. But this is thought to be a remote possibility,as it

is likely to impair the value of Dubai World assets,leaving everyone worse off, the report said. The options

are still being considered by Aidan Birkett of Deloitte,the new chief restructuring officer of Dubai World, the National said.