Dubai World (the "Company") announced today that headline
economic terms have been agreed in principle with the Coordinating Committee ("CoCom"), representing
the Company's financial creditors, and the Government of Dubai on the restructuring of $23.5 Bn
1 of totalfinancial liabilities. The CoCom accounts for approximately 60% of the bank lenders.
Since Dubai World presented its restructuring proposal on 24 March 2010, the Company and the CoCom
have been engaged in constructive discussions. Following these discussions, the proposal has been refined
to provide options that better accommodate the needs of our large and diverse lending group.
Commenting, Aidan Birkett, Chief Restructuring Officer of Dubai World, said:
"We are pleased that we have received unanimous support in principle of the CoCom on the headline
economic terms to our restructuring proposal. This is an important milestone and reflects our efforts to
achieve the best possible solution for all stakeholders. The proposal puts the Company on a sound
financial footing and reflects the continued support of the Government of Dubai and its lenders. It offers
the Company the ability to maximise the value of its assets over the medium to long term."
Post restructuring the Company's financial indebtedness will be approximately $14.4 Bn and comprise
two tranches, Tranche A of $4.4 Bn and Tranche B of approximately $10.0 Bn with five and eight year
maturities respectively. Each lender will receive a rateable portion of both Tranche A and Tranche B and
will be able, on the terms described in the attached table, to select options for its Tranche B participations.
Bank lenders who have funded in USD will be able to elect between Option 1 and 2 while lenders who
have funded in AED will, in addition to Option 1 and 2, be able to elect Option 3 below. Banks will be
entitled to elect different options for which they are eligible for different parts of their debt.
Option 1 has been designed to address the preferences of lenders who value an increased shortfall
guarantee. The shortfall guarantee would be used if the Company cannot repay or refinance Tranche B at
maturity.
Option 2 offers lenders a higher overall Payment-in-Kind ("PIK") coupon for which lenders forgo the
increased shortfall guarantee offered in Option 1.
Option 3 is in recognition of the differential cost of funds between EIBOR and LIBOR. Lenders who
extended facilities in AED which include a number of international banks and who elect this option forgo
a shortfall guarantee but receive higher cash and PIK coupon.
The final proposal has not changed in its fundamentals from the terms announced on 25 March 2010. In
particular, there is no additional financial support from the Government of Dubai.
However the PIK
1
$23.5 Bn refers to the financial liabilities as at 31 December 2009 of Dubai World exclusive of the liabilities ofany subsidiaries.
interest, which the Company pays using part of the future value of its assets in eight years, has
been modestly enhanced.
As announced on 25 March 2010, the Government is converting $8.9 billion of debt and claims into
equity, and committing to fund up to $500m of SG&A expenses and an interest facility of up to $1.0
billion while maintaining 100% ownership of the Company.
The restructuring proposal requires the agreement of the rest of Dubai World's financial creditors. The
Company will continue to work in conjunction with the CoCom to achieve this.
