Japan bank joins Dubai debt panel
Dubai, January 19, 2010
Bank of Tokyo-Mitsubishi has joined Dubai World's creditor committee, delaying the conglomerate's debt standstill proposal and making an agreement unlikely before the end of the month, bankers familiar with the situation said.
State-owned Dubai World was expected to present its request to delay repayment of some $22 billion in debt by mid-January and the lack of information has been causing unease among investors.
Bank sources on Tuesday said the Japanese bank joined the six-member creditor committee to gain influence in debt talks.
"Tokyo Mitsubishi is in now. This has been communicated to us last week," said a Gulf-based banker at a large international bank. "Banks have been allowed to the committee on the basis of their exposure but also on their expertise.
"On average it's been said the creditors committee (excluding Bank of Tokyo) represents around 60 percent of Dubai World's debts."
The panel, which has yet to be formally announced by Dubai World, has four British and two United Arab Emirates' banks.
"They (Tokyo Mitsubishi bank) want to have the benefit of what the others have done - due diligence, checks ... and this takes longer to get approval," said a Dubai-based banker who asked not to be identified. "A standstill agreement will now be more towards the end of the month."
Dubai World rocked global markets on November 25 when it said it would ask creditors to agree a standstill on $26 billion of debt, linked to its main property units, Nakheel and Limitless.
A last-minute bailout from Abu Dhabi in December helped Dubai avert default on a $4.1 billion Islamic bond by Nakheel. But there has been no formal proposal to creditors on a debt standstill, which would enable it to restructure its operations.
Dubai World signalled in December it expected creditor approval on its debt proposal by the end of January. -Reuters