In the next two weeks, Dubai World will have a better idea how many of its army of bank creditors have gone for its ambitious plans to restructure US$23.5 billion (Dh86.31bn) of debts that threatened its survival, and the emirate's economic well-being.
On Wednesday, the financial creditors to its property offshoot, the Palm Jumeirah developer Nakheel, meet to consider terms of a multibillion-dollar deal on its debts. Then it's the turn of Dubai World's creditors to consider plans to restructure some $14.4bn of loans at an all-bank meeting in Dubai on July 22.
"They've had a long time to digest all this and it would be a surprise if most of them don't eventually go for it. But there have been surprises before in this process, so don't rule it out," says an adviser who asked to remain anonymous. A Dubai World spokesman says nothing will be decided at the meetings, which are being held to present more detailed information on the proposals.
It has been a case of "gently, gently" for Dubai World ever since it first announced the restructuring last November. Back then, the unexpected nature of the announcement, coming after months of assurances from Dubai World that it could meet its financial obligations in full, sent international markets into short-term panic and raised fears about the emirate's overall creditworthiness.
Dubai World's advisers have learnt a thing or two from that episode. Creditors have been kept better informed, the process has been more transparent and, crucially, the early agreement of key banks was obtained before any dissident bandwagon could begin to roll.
When the proposals to resolve the debts were unveiled in March, senior members of the seven-strong co-ordinating committee (CoCom) quickly welcomed them in principle, undercutting opposition from more junior creditors.
By May, the key CoCom members - Royal Bank of Scotland, Standard Chartered, HSBC, Lloyds, Emirates NBD, Abu Dhabi Commercial Bank and Bank of Tokyo-Mitsubishi UFJ - were ready to give their acceptance to the proposals. As they represented more than 60 per cent of the outstanding liabilities, that was the key moment in the negotiation process that culminates in the meeting next week.
Two men, and the relationship between them, have been crucial to the relatively smooth progress of the proposals so far: Aidan Birkett, the chief restructuring officer of Dubai World, and Bob Hedger, the debt restructuring specialist from RBS, which chairs the Cocom.
"They've worked together before on several projects and know each other's mindset. It's been a mutually beneficial arrangement for both sides," says an adviser.
The initial proposals essentially asked creditors to extend the terms of their outstanding liabilities to either five or eight years, and were offered a new annual interest rate of 1 per cent over that period.
Most went for the deal as it stood, mindful of the fact that there was no real alternative: Dubai World had already put in place provisions for controlled bankruptcy under a new law, Decree 57 from the Dubai Government, which would have left them with nothing in the case of rejection of Mr Birkett's proposals. The "stick" of Decree 57, alternating with the "carrot" of eventual repayment, was used throughout the negotiations.
There were some reservations from regional banks, which told Mr Birkett bluntly that the return of 1 per cent was not enough; their cost of borrowing in the Gulf, where capital is expensive compared with the rest of the world, made that proposal uneconomic.
When final proposals were announced in May, the fears of regional banks were assuaged by a provision that enabled them to elect for a 2 per cent coupon on their debts. It was enough to gain their acceptance of the terms.
Having won over the seven principal bankers, Dubai World has left it to them to persuade the rest of the creditors to accept the deal. With Dubai World debt held by a total of 73 banks (including the seven CoCom members) from around the world, it has been an exhausting process. Each CoCom member has overseen one grouping of smaller creditors to persuade, cajole and encourage into acceptance. One financier likened it to trying to pen sheep in an old-fashioned English sheepdog trial.
With that many banks involved, there are bound to be recusants. In particular, the Europeans among the remaining 66 lenders have seen their own debt problems increase since then and might be less willing to accept Dubai World's terms. But each remaining bank has a relatively small exposure, so it should not affect the outcome.
If Dubai World gets the acceptance of banks holding two thirds of the debt, it can use the threat of Decree 57 to frighten the rest into submission, as well as a stack of other tactics used by restructuring experts in these situations, including the threat of cold-shouldering the dissident bank from big deals in the future.
For a major debt restructuring involving so many creditors, the process has gone pretty smoothly so far. If the vast majority gives its approval at the all-bank meeting in Dubai, Mr Birkett hopes to be able to clinch a full deal by October or November.
The other part of his strategy - the revival of the Dubai economy through the resuscitation of the emirate's property sector - will take some time longer to achieve.
fkane@thenational.ae
The Little Things
Directed by: John Lee Hancock
Starring: Denzel Washington, Rami Malek, Jared Leto
Four stars
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
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Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
How it works
1) The liquid nanoclay is a mixture of water and clay that aims to convert desert land to fertile ground
2) Instead of water draining straight through the sand, it apparently helps the soil retain water
3) One application is said to last five years
4) The cost of treatment per hectare (2.4 acres) of desert varies from $7,000 to $10,000 per hectare
MATCH INFO
Manchester United 6 (McTominay 2', 3'; Fernandes 20', 70' pen; Lindelof 37'; James 65')
Leeds United 2 (Cooper 41'; Dallas 73')
Man of the match: Scott McTominay (Manchester United)
Essentials
The flights: You can fly from the UAE to Iceland with one stop in Europe with a variety of airlines. Return flights with Emirates from Dubai to Stockholm, then Icelandair to Reykjavik, cost from Dh4,153 return. The whole trip takes 11 hours. British Airways flies from Abu Dhabi and Dubai to Reykjavik, via London, with return flights taking 12 hours and costing from Dh2,490 return, including taxes.
The activities: A half-day Silfra snorkelling trip costs 14,990 Icelandic kronur (Dh544) with Dive.is. Inside the Volcano also takes half a day and costs 42,000 kronur (Dh1,524). The Jokulsarlon small-boat cruise lasts about an hour and costs 9,800 kronur (Dh356). Into the Glacier costs 19,500 kronur (Dh708). It lasts three to four hours.
The tours: It’s often better to book a tailor-made trip through a specialist operator. UK-based Discover the World offers seven nights, self-driving, across the island from £892 (Dh4,505) per person. This includes three nights’ accommodation at Hotel Husafell near Into the Glacier, two nights at Hotel Ranga and two nights at the Icelandair Hotel Klaustur. It includes car rental, plus an iPad with itinerary and tourist information pre-loaded onto it, while activities can be booked as optional extras. More information inspiredbyiceland.com
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
SOUTH%20KOREA%20SQUAD
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Indoor cricket in a nutshell
Indoor Cricket World Cup – Sep 16-20, Insportz, Dubai
16 Indoor cricket matches are 16 overs per side
8 There are eight players per team
9 There have been nine Indoor Cricket World Cups for men. Australia have won every one.
5 Five runs are deducted from the score when a wickets falls
4 Batsmen bat in pairs, facing four overs per partnership
Scoring In indoor cricket, runs are scored by way of both physical and bonus runs. Physical runs are scored by both batsmen completing a run from one crease to the other. Bonus runs are scored when the ball hits a net in different zones, but only when at least one physical run is score.
Zones
A Front net, behind the striker and wicketkeeper: 0 runs
B Side nets, between the striker and halfway down the pitch: 1 run
C Side nets between halfway and the bowlers end: 2 runs
D Back net: 4 runs on the bounce, 6 runs on the full
Tips for job-seekers
- Do not submit your application through the Easy Apply button on LinkedIn. Employers receive between 600 and 800 replies for each job advert on the platform. If you are the right fit for a job, connect to a relevant person in the company on LinkedIn and send them a direct message.
- Make sure you are an exact fit for the job advertised. If you are an HR manager with five years’ experience in retail and the job requires a similar candidate with five years’ experience in consumer, you should apply. But if you have no experience in HR, do not apply for the job.
David Mackenzie, founder of recruitment agency Mackenzie Jones Middle East
SQUADS
South Africa:
JP Duminy (capt), Hashim Amla, Farhaan Behardien, Quinton de Kock (wkt), AB de Villiers, Robbie Frylinck, Beuran Hendricks, David Miller, Mangaliso Mosehle (wkt), Dane Paterson, Aaron Phangiso, Andile Phehlukwayo, Dwaine Pretorius, Tabraiz Shamsi
Bangladesh
Shakib Al Hasan (capt), Imrul Kayes, Liton Das (wkt), Mahmudullah, Mehidy Hasan, Mohammad Saifuddin, Mominul Haque, Mushfiqur Rahim (wkt), Nasir Hossain, Rubel Hossain, Sabbir Rahman, Shafiul Islam, Soumya Sarkar, Taskin Ahmed
Fixtures
Oct 26: Bloemfontein
Oct 29: Potchefstroom
Remaining fixtures
- August 29 – UAE v Saudi Arabia, Hazza bin Zayed Stadium, Al Ain
- September 5 – Iraq v UAE, Amman, Jordan (venue TBC)
The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
On sale: Now
Dr Afridi's warning signs of digital addiction
Spending an excessive amount of time on the phone.
Neglecting personal, social, or academic responsibilities.
Losing interest in other activities or hobbies that were once enjoyed.
Having withdrawal symptoms like feeling anxious, restless, or upset when the technology is not available.
Experiencing sleep disturbances or changes in sleep patterns.
What are the guidelines?
Under 18 months: Avoid screen time altogether, except for video chatting with family.
Aged 18-24 months: If screens are introduced, it should be high-quality content watched with a caregiver to help the child understand what they are seeing.
Aged 2-5 years: Limit to one-hour per day of high-quality programming, with co-viewing whenever possible.
Aged 6-12 years: Set consistent limits on screen time to ensure it does not interfere with sleep, physical activity, or social interactions.
Teenagers: Encourage a balanced approach – screens should not replace sleep, exercise, or face-to-face socialisation.
Source: American Paediatric Association
Glossary of a stock market revolution
Reddit
A discussion website
Redditor
The users of Reddit
Robinhood
A smartphone app for buying and selling shares
Short seller
Selling a stock today in the belief its price will fall in the future
Short squeeze
Traders forced to buy a stock they are shorting
Naked short
An illegal practice
