Dubai not restructuring debt but may refinance it

Dubai: Dubai has no plans to restructure the debt of government-linked companies but it may take recourse to refinancing options, the emirate said, amid worries over the debt pile of state entities.

Sheikh Ahmed bin Saeed Al Maktoum, chairman of Dubai’s Supreme Fiscal Committee, in a press statement, refuted reports of plans to restructure debt of companies related to government in 2012.[caption id=“attachment_151791” align=“alignleft” width=“380” caption=“Emirates Airlines, Chairman and Chief Executive, Sheikh Ahmed Bin Saeed Al-Maktoum. Reuters”]  [/caption]

Dubai had earlier this year exercised the option of restructuring to settle the debt issues of its flagship company Dubai World, that had sent shock waves in world markets two years back by warning of a possible default.

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Ratings agency Moody’s this week flagged off concerns that three state-linked entities in Dubai will need to repay or refinance around $3.8 billion worth of debt that matures in 2012.

While restructuring refers to changing the terms of debt in favour of the borrower, the refinancing option involves issuing fresh debt to repay the existing one.

Sheikh Ahmed said the government is following a solid financial policy that enhances trust in the ability of government-related companies in meeting all their financial obligations.

He clarified that the government of Dubai may where necessary consider the refinancing part of the financial obligations of government-related entities and was fully prepared to support the companies through all available means.

PTI