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Sun 29 Nov 2009 01:27 PM

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Dubai World could still repay Nakheel bond debt

Advisers considering four options for conglomerate, including meeting repayment deadline.

Dubai World advisers are still deciding whether the conglomerate should repay real estate developer Nakheel's $3.5 billion Islamic bond, or sukuk, on December 14, it has been reported.

According to the National on Sunday, repayment of the loan is just one of four alternatives being considered by Aidan Birkett of Deloitte, the new chief restructuring officer of Dubai World.

Birkett was appointed to oversee the conglomerate’s reorganisation along with the investment bank Rothschild and the US corporate specialists AlixPartners, the paper said.

As part of the restructuring programme, investors were advised on Wednesday of a “standstill” of Nakheel’s bond, throwing world markets into turmoil.

According to the paper, if Dubai World pays back the loan it would “solve a problem for the company and its bondholders”.

Other options being considered are to offer bondholders 80 percent redemption of the value of their holdings, the paper reports. Or the firm may freeze the debt until May 30 with a view to renegotiating a rescheduling of its debts.

The most drastic action would be for the company to liquidate assets in response to legal action by creditors, however, this is believed to be a remote possibility.

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