Dubai World is Still a Mess. But Not a Standstill. Nope.
Dubai World, which is seeking to restructure about $22 billion of debt, did not present a “standstill” offer to lenders at a meeting in the emirate today, a company spokesman said.
The company and its advisers presented to bankers part of the state-owned holding company’s plan to restructure its borrowings, said the Dubai World spokesman who declined to be identified because of company policy.
Dubai World said it will continue working with creditors to reach a standstill agreement on its borrowing “in an orderly way.” The company in a statement said it received assurances from the Dubai government that it will receive “financial support to cover working capital and interest expenses to ensure the continuity of key projects” if a standstill is achieved.
Dubai World, one of the emirate’s three main state-owned business groups, announced Nov. 25 it would seek to freeze or delay repaying debt until at least May 30. The company said Dec. 1 it wants to alter terms on about $26 billion of debt, including of property unit Nakheel PJSC, which is building palm tree-shaped islands off the emirate’s coast. It repaid $4.1 billion on an Islamic bond from Nakheel last week after Dubai received a $10 billion loan from Abu Dhabi.
Sooo... Doing the math, that leaves them $5.9 billion to work with and $30 billion more in debt to default on. So?
That's what bailouts are for!
Troubled government-owned conglomerate Dubai World, which is restructuring $22 billion of debt, said Monday that the city-state will cover the company's working capital expenses.
"As long as a standstill is successfully implemented, Dubai World has assurances that the Government of Dubai, through the DFSF, will provide financial support to cover working capital and interest expenses to ensure the continuity of key projects," an emailed statement from Dubai World said.
The DFSF, or Dubai Financial Support Fund, has been set up to manage the money being used to pay off the emirate's $80 billion debt pile.
Fucking acronyms. I know what that means.