Dubai world, the chronically indebted state-backed conglomerate, yesterday said that it had struck a deal with its lenders to restructure $23.5bn of debt, which it hopes will not only save the company's reputation, but will also help to ease the pressure on the emirates' troubled economy.
The Gulf state, with its ostentatious building projects that attracted film stars and the leading lights of western finance alike, will hope that the agreement with 60% of Dubai World's lenders will lift the cloud that descended on its economy when the group asked investors for more time to meet a bond repayment.
Dubai World rocked global |financial markets last November when it asked lenders for a six-month moratorium on $4bn of debt repayments due a month later. The request came on the eve of Eid al-Fitr, the three-day holiday, leaving lenders in a state of flux.
The company hailed the agreement yesterday, arguing that it would help to repair confidence in the group.
The deal still requires the approval of the lenders that were not involved in the negotiations, but while analysts welcomed the announcement, they warned that Dubai World still has work to do.