Dubai World said to repay $300m early to creditors

Sources say state-owned conglomerate has made a second early repayment under $25bn debt restructuring plan
Dubai World said to repay $300m early to creditors
By Reuters
Thu 03 Jul 2014 04:39 PM

Dubai World, one of the emirate's big state-owned conglomerates, has made a second early repayment worth around $300m under its $25bn debt restructuring plan, sources familiar with the matter said on Thursday.

The payment - made at the end of June - came from the proceeds of asset sales completed by the firm and follows an initial sum of $284.5m returned in March to creditors, which include dozens of local and international lenders.

A spokesman for Dubai World declined to comment.

A top executive in the emirate, Mohammed Al Shaibani, told Reuters earlier this year that Dubai World planned to make further early debt repayments after the March payment, as well as meet the first scheduled repayment under the restructuring plan - $4.4bn due in May 2015.

Dubai World ran into trouble during the emirate's 2009 property market collapse, forcing it into one of the Middle East's largest-ever debt restructurings.

Its fortunes have begun to rebound in line with the wider Dubai economy, which has seen key industries like tourism and logistics boom and real estate prices recover from their nadir.

Other Dubai state-linked entities have also announced positive debt news in recent days, with developer Nakheel saying it would pay all of its $1.5bn outstanding debts under its restructuring plan by August, while real estate finance firm Amlak confirmed a new proposal had been put to creditors on $2.7bn of debt.

"Dubai's recovery from the excesses that led to the 2009 bust is well entrenched, broadening and gaining pace," Jean-Michel Saliba, economist for the Middle East and North Africa at Bank of America-Merrill Lynch, said in a July 3 note.

"There is steady, yet uneven, progress in Dubai government-related entities (GREs) deleveraging. The real estate recovery and improved banking sector liquidity have given breathing space to GREs," he said, adding a mixture of internal cash generation, asset sales and refinancings would be among the factors to help Dubaimeet its large overall debt pile.

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