Lenders welcome Dubai World's debt plan: Report

DUBAI: Creditors have "well received" Dubai's plan to restructure the debt of its troubled firm, Dubai World, local press reported Thursday quoting a top official.

"The offer has been well received by the financial institutions, contractors and investors," Ahmed bin Humaid al-Tayer, governor of Dubai International Financial Centre (DIFC), told a conference, Khaleej Times reported.

The DIFC governor described the interest rate offered to advisors and bankers as "the best possible in the current circumstances," and ruled out any obstacles in achieving a deal.

He did not disclose the interest rate.

Tayer is also chairman of the Emirates National Bank of Dubai, one of Dubai World's biggest creditors.

The Dubai government had announced last month that it would inject 9.5 billion dollars into its debt-laden Dubai World, asking creditors to wait for up to eight years to be repaid in full.

After wrangling for months with creditors, the firm said that it was issuing two tranches of new debt that would mature in five years and eight years.

Dubai World said that the total negotiated debt owed to creditors amounts to 14.2 billion dollars, out of 23.5 billion dollar debt up for restructuring.

Dubai rocked global financial markets in late November when it said it might need to freeze debt payments by its largest conglomerate Dubai World, stoking fears of a state default over sovereign debt.

But it has issued bonds worth 20 billion dollars since February last year to buoy its troubled firms, which has been fully subscribed.

The Abu Dhabi-based central bank subscribed with 10 billion dollars, while the government of Abu Dhabi and two Abu Dhabi-backed banks subscribed to five billion dollars each.