Factbox: Dubai World restructuring plan

By Thomas Atkins  www.reuters.com

The deal, which includes $9.5 billion aid from Dubai, now faces a jury of creditors.

Initial response from the market has been positive.

Following are details of the plan:

$9.5 BILLION AID

Dubai promised to recapitalize Dubai World and the conglomerate’s Nakheel NAKHD.UL property unit with $9.5 billion aid through its Dubai Financial Support Fund (DFSF).

Nakheel will get $8 billion to fund operations and settle liabilities. The $1.5 billion balance will go to Dubai World.

There was no new aid from oil-rich neighbor Abu Dhabi.

The cash-strapped Dubai government said it would inject $3.8 billion through internally generated funds, but did not specify where those funds would come from. Most of the $9.5 billion will come from $5.7 billion left from Abu Dhabi’s $10 billion loan in December, which helped Dubai World stave off a default.

$10.1 BILLION DEBT-FOR-EQUITY SWAP

Dubai plans to convert $8.9 billion of Dubai World’s debt into equity. The company is already wholly owned by the government. The government will also convert its existing $1.2 billion debt claim in Nakheel to equity.

MATURTIY EXTENSIONS

Bank creditors can expect to receive 100 percent of principle repayment as the company issues two tranches of new debt with five and eight-year maturities.

At the end of December, Dubai World creditors held outstanding debt of $14.2 billion, excluding the DFSF.

NAKHEEL’S DEAL

Nakheel’s Islamic bonds will be repaid in full on maturity as long as creditors approve the deal.

Dubai will take full ownership of Nakheel once a debt restructuring plan is completed.

Nakheel’s trade creditors with outstanding claims of up to 500,000 dirhams ($136,000) will be repaid in cash.

For creditors with claims above that, 40 percent will be paid in cash and the balance in the form of a “publicly tradeable security,” expected to be a bond or note.

Secured bank creditors will receive principal and accrued interest or profit through a rollover and maturity extension on existing facilities, based on EIBOR/LIBOR rates.

Nakheel will use a “significant” portion of the funds provided by the DFSF for completing near-term projects.

Customers invested in longer-term projects will be given credit equivalent to 100 percent of their installment payments and an option to swap into projects nearing completion at current market prices.

LIMITLESS EXCLUSION

Limitless World, which once attempted to build a 75-kilometre inland waterway called the Arabian Canal, and which has a $1.2 billion loan repayment due later this month, was left out of from Dubai World’s restructuring plan.

Limitless’s lenders, which include UAE banks such as Emirates NBD ENBD.DU and Emirates Islamic Bank EIB.DU as well as international players such as Royal Bank of Scotland (RBS.L), asked for the company to be excluded from overall restructuring so that the loan could be negotiated separately.