Dubai World Rescheduling - Draft Restructuring Plan to Be Presented?

 

Two reports out.

Maktoob quoting a Reuters story quoting unnamed bankers states:

1. DW will put forth an initial proposal to creditors as early as this week, but problems valuing Nakheel are delaying finalization of the Plan.  AA:  That probably means the values at Nakheel are much less than anticipated.  And does one use current depressed values?  Or assume that these will increase over some time period?
2. "what's being offered will not be as bad as feared"  AA:  Perhaps a good negotiating strategy.  If banks are worried about a 40% haircut a 20% haircut might sound "good".

The Financial Times has another take also from unnamed bankers - presumably a different lot that Reuters spoke to:

1. Meetings with major creditors in London starting this week.
2. Initial outline plan to be offered.  Two options.  Bigger haircut and shorter tenor.  Smaller haircut and longer tenor.  Some injection of new funds.
3. Potential for split among creditors as different groups may wish to see any new funds or concessions focused on those members of the DW Group with most impact on them.  By way of example, the article mentions local banks possibly preferring support being directed to Nakheel and Limitless given exposure of other local bank clients to these two entities.

This is a key issue.  As I posted earlier, often the most contentious debates and negotiations in a restructuring take place among the creditors.   The problem for DW is that if the creditors get hung up among themselves, DW suffers as well.  And the Emirate.