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Wed 24 Mar 2010 09:29 AM

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Dubai World to get Dubai govt funding - paper

Fund to support restructuring process through financing loans due in short term.

Dubai World to get Dubai govt funding - paper
(Google Images)

Dubai World will receive government aid from the Dubai Financial Support Fund for financing operating expenses as well as payments to contractors, a newspaper reported on Wednesday, citing unnamed sources.

The sources told the daily
Al Ittihad

that the fund would support the restructuring process through financing loans due in the short term.

The goverment support is part of the offer Dubai World would make to creditors and still depends on their agreeement, the Arabic-language paper said.

The sources told the paper that government support through the fund will be made on commercial terms and "reasonable interest" the payment of which will begin once an improvement in the level of cash flow in Dubai World's units.

The chances of the creditor banks approving the restructuring proposal was "very high", since it was the fruit of four months of bilateral negotiations

The sources said "justice" in the proposal would not necessarily mean equality as it would depend on the type of debt.

Dubai World's had classified its real estate, investment and logistics assets as "good", meaning no intervention was needed, "low-yielding", meaning they were susceptible to the restructuring process, and finally loss-making assets, which could be sold or split off administrativelty from the rest of the group, the paper said. (Reuters)

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