Dubai's largest corporate entity Dubai World ("Dubai World") and its subsidiaries (the "Group") published on Tuesday an announcement to update their lenders on recent developments relating to their debt obligations. "Dubai World has concluded that it should immediately consider alternatives in respect of the debt obligations of certain entities within the Group," it said.
The company specified the subsidiaries to be included in the new process. "The proposed restructuring process will only relate to Dubai World and certain of its subsidiaries including; Nakheel World and Limitless World. The process will not include Infinity World Holding, Istithmar World and Ports '&' Free Zone World (which includes DP World, Economic Zones World, P'&'O Ferries and Jebel Ali Free Zone), all of which are on a stable financial footing," it said.
The total value of debt carried by the companies subject to the restructuring process amounts to approximately US$26 billion, of which approximately US$6 billion relates to the Nakheel sukuk, it added.
"It is envisaged the restructuring process will be carried out in an equitable way for the overall benefit of all stakeholders and will comprise several phases including: long term plans and commitment of stakeholders; determination of maintainable profit and cash generation; assessment of deleveraging options, including asset sales; assessment of funding requirements and the formulation of restructuring proposals to financial creditors and their implementation."
"Initial discussions have commenced with the banks of Dubai World and are proceeding on a constructive basis," it said.
Moelis '&' Company have been appointed to advise on the Dubai World restructuring with Rothschild, who will continue their ongoing role as financial advisor.