Dubai announces $9.5bn debt restructuring plan

25 March 2010

Dubai's government has announced details of its debt restructuring plan for Nakheel and Dubai World - including a commitment to provide $9.5 billion of additional funding.

It said that the money will be made up of $5.7 billion left over from the $10 billion bailout provided by Abu Dhabi last year, with the rest coming from the goverment's own resources.

Around $8 billion worth of the money will be put towards paying off the debts of property development company Nakheel.

Creditors will now have the opportunity to decide on whether to accept the restructuring package, which includes full repayment to all non-government creditors of Dubai World.

"This proposal represents the best possible solution for all stakeholders," a spokesman for Dubai World said.

"It follows extensive discussions with our creditors, a thorough review of Dubai World's businesses and significant financial support from the government."

Many of the banks most exposed to Dubai World's debts are based in the UK - Royal Bank of Scotland, Standard Chartered and Lloyds are all estimated to be owed more than $5 billion each by the organisation, reported AFP.

By Asim Shah

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