Dubai World has reached agreement with a "substantial majority" of creditors to back its $14.6 billion debt restructuring, the state-owned conglomerate said on Monday, putting the emirate on track to clear the last big hangover from a debt crisis.
Dubai's economy has rebounded strongly from a local property crash which triggered a wave of debt restructurings at state-owned entities at the turn of the decade - most notably Dubai World's request for a debt standstill on $25 billion of obligations in 2009 that resulted in a global markets sell-off.
It has been in talks with lenders for months to secure a renegotiation of terms of the debt deal it signed in 2011 which followed the 2009 standstill request.
On Monday, it said it had made a "voluntary arrangement notification" under Decree 57 -- legislation brought in by the Dubai government to administer the conglomerate's previous restructuring at the turn of the decade -- to amend its existing debt deal.
The notice was the first formal notification from the conglomerate that support from creditors for a new deal had passed the 67 percent mark -- the level needed to authorize a change of terms to the restructuring.
Top Dubai officials had indicated in recent weeks that creditor support was close to this mark, while banking sources told Reuters last month that Dubai World had received 70 percent of creditors' support for its revised restructuring deal after talks with lenders in Dubai and London in early December.
The new restructuring plan involves repaying early an existing $2.92 billion maturity due in September 2015, Dubai World said. The company would extend a 2018 repayment to 2022, with higher pricing, an amortizing structure and more collateral backing the loan, it added.
This confirmed a Reuters story from September which detailed the terms being offered to creditors.
The restructuring deal could take several months to complete, Dubai World's statement said, as the Decree 57 process will be administered by a court in Dubai's financial free zone.
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