Friday, May 21, 2010

Dubai lenders ink debt deal

Dubai World, a state owned company of the oil rich emirate, Dubai, has reached a deal to restructure its $23.5 billion worth of debt.

The deal emerged after many months of discussions between Dubai World executives and a number of bankers and world financial specialists. More specifically, a committee representing around 90 lenders was formed in order to work out a deal with the debt ridden company, which is involved in many of the high-profile real-estate developments currently taking place in the city.

The lenders, which include HSBC, Royal Bank of Scotland and Mitsubishi UFJ, have collectively agreed to extend the timeframe of Dubai World's loans, giving the company time to cut costs, sell assets and have a better chance of paying back its many billions in debt.

The banks will reportedly be given an interest rate based on currency and maturity. The interest rate will vary from lender to lender.

The Dubai Stock Market rose 1 percent on the news.
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