Dubai World mulls refinancing a further $850m

The firm at heart of the emirate’s debt crisis signed final deal with creditors in April
Dubai World includes DP World, Nakheel and Drydocks World among its units
By Claire Ferris-Lay
Thu 26 May 2011 05:57 PM

State-owned conglomerate Dubai World, the firm at the heart
of the emirate’s debt crisis, is considering refinancing a further $850m, it
emerged Thursday.  

Dubai World, which includes DP World, Nakheel and Drydocks
World among its units, signed a final agreement with its 80 creditors to
restructure $26bn of debt in April. 

The move by the group’s subsidiary, Port & Free Zone
World (P&FZ), is revealed in a prospectus produced by DP World, which is
due to list its shares on the London Stock Exchange next week, said the UK’s Guardian newspaper.

“[DP World] understands that Port & Free Zone World FZE
is considering refinancing its outstanding net debt facilities of approximately
$850m, secured in part against certain of its shares in the company, in the
short to medium term,” the document said.

“Options to refinance the facilities include, inter alia,
further bank loans, asset disposals, public market bond issues (including
equity-linked bonds) or the sale of shares in the company.”

The news follows a day after DP World announced it would
begin trading its shares on the London Stock Exchange on June 1. The firm
believes that a duel listing between the London Stock Exchange and Nasdaq Dubai
will help to boost interest in the firm.

Dubai World, one of the emirate’s three main state-owned
holding companies, in April said its creditors will $4.4bn in five years while
the second tranche will involve $10.3bn over eight years at a fixed interest
rate of 2.4 percent.

Dubai World said in July it was prepared to sell prized
assets including previously ringfenced ports firm DP World in a bid to raise
cash.

Sheikh Ahmed Bin Saeed Al Maktoum, the company’s chairman,
said in May that the firm can’t afford to default on its debt and is able to
meet its credit obligations. 

“Whatever [commitment] we have at the end of the day, we are
committed to do it, and we will do it,” he said. 

 “I don't think we can afford today, if we have
anything, to default on it. It is a matter of credibility and I’m sure we will
be able to demonstrate this in the coming years.”

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