Banks 'looking for different Dubai terms'

11 July 2012

Three major banks are looking for different terms to be established on their debt restructuring deals with Dubai, it has emerged.

Royal Bank of Scotland, Standard Bank and Commerzbank AG had walked away from talks with the state-owned Dubai Group regarding this $10 billion agreement, sources told Bloomberg earlier this week.

However, insiders have informed the news source this morning (11 July) that the financiers could resurrect negotiations - which initially lasted around 18 months - should Dubai lower its demands for loan maturities of 12 years.

The banks believe the state has little choice but to alter its requests in order to restore its reputation following its near-default three years ago.

Fahd Iqbal, director of research at EFG Hermes, said: "This could be a negotiation tactic by the banks involved to get better terms from Dubai Group."

Mr Iqbal went on to say it is unlikely the lenders will decide to pursue any form of legal action due to the "lack of precedent" in the United Arab Emirates.

By Asim Shah

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