Dubai debt saga continues to unfold (By IFN)

UAE: In a new twist to the Dubai debt saga, investment firm Dubai Group has reportedly offered to repay its creditors over a period of five-10 years in an effort to restructure its US$6 billion-worth of bank debt; after the emirate’s Supreme Fiscal Committee said no to a request for a US$2 billion cash injection.
According to reports, Dubai Group has told its 44 creditor banks; which have not received interest and profit payments on their loans since August 2010, that the government committee has walked out on talks to restructure its debt and that there will be no financial support from the government. The request for government cash first materialized in December, from members of the bank steering committee involved in the debt deal.

The roadblock has now led Dubai Group to offer secured lenders, owed US$3.2 billion in loans backed by assets, a payment of principal in five years; while partially secured and unsecured lenders will be paid over eight-10 years. The firm is expected to present its debt settlement deal at the end of February.
Meanwhile, Jebel Ali Free Zone (Jafza), another Dubai entity, is said to be in talks with Dubai Islamic Bank, the National Bank of Abu Dhabi and Standard Chartered on how to repay its AED7.5 billion (US$2 billion) Sukuk due in November this year.

Jafza could repay AED500 million (US$136.18 million)-worth of the Sukuk by itself, with the bulk of the debt expected to be rolled over via a syndicated financing and a new Sukuk.

The new Sukuk could be issued after September this year; although no banks have been mandated for the deal yet.