Source :AP, May 21, 2010, 12.33am IST
DUBAI: Dubai World, whose default fears had rocked global markets, on Thursday said it reached agreement "in principle" with most of its bank lenders to restructure some $23.5 billion in debt.
The agreement still needs the backing of other lenders but appears to give the heavily-indebted Dubai some breathing space in dealing with the obligations of its state firms.
"Dubai World is pleased to announce that headline economic terms have been agreed in principle with the coordinating committee" representing 60% of the group's bank lenders, the company said in a statement.
According to the agreement, the company will divide $14.4 billion of debt into two tranches, maturing in five and eight years respectively, while the government will convert $8.9 billion of aid to the company into equity.
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