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Thu 25 Mar 2010 11:21 AM

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$8.9bn of Dubai World debt will be converted to equity

Dubai gov't proposes move to convert 38% of conglomerate's $23.5bn debt.

$8.9bn of Dubai World debt will be converted to equity
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Dubai Government has announced it will convert more than a third of Dubai World’s $23.5bn debt into equity.

Earlier on Thursday it was announced that Dubai World would receive $1.5bn in new funding from the Dubai Government, as part of a $9.5bn debt restructuring plan.

However, the government is proposing $8.9bn of the current debt – equivalent to 38 percent – into equity.

In a statement, the company said this would mean Dubai Government “subordinating its claims to other creditors”.

In addition, the statement said that non-DFSF creditors would receive 100 percent principal repayment “through the issuance of two tranches of new debt with five and eight year maturities”.

Click
here

for the official statement regarding Dubai World.

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