Dubai World has offered its creditors a “shortfall” guarantee as part of its restructuring proposal, a government spokesperson confirmed to 7DAYS yesterday.
If the sale of Dubai World’s assets does not give it enough money to repay its debts, the Dubai government will cover the shortfall up to a certain level, the spokesperson said.
Last week, Dubai World said that it would repay its debts in full in five to eight years and that the government would inject $9.5 billion into the group to support it during its restructuring of debts.
Nakheel, Dubai World’s troubled property unit, is to receive $8 billion of the government injection.
Analysts have since voiced concern that Dubai World’s assets and the government injection might not be enough to repay debts in full, due to the decline in some asset values, particularly property, since the start of the global economic crisis.
Tudor Allin Khan, chief economist at Al Futtaim HC Securities, had told 7DAYS on Sunday that creditor banks might still face a reduction in the value of assets.[Read More]
