Crisis-hit conglomerate Dubai World is expected to approach lenders this week, with its proposal to restructure $22 billion-debts, says a media report.
The Financial Times has reported that the entity has called leading creditors to London for meeting "starting as early as Monday".
"Dubai World is expected to approach lenders for the first time this week with a suggested proposal for restructuring $22 billion of its debts," the UK daily reported on Sunday quoting people close to the situation.
Late last year, Dubai World sought more time to repay its debts, a move which then pushed global markets into a tizzy. According to the publication, the restructuring plan is expected to offer lenders an option to be repaid over several years but with a "haircut", or to be repaid more over a longer term, potentially with a government guarantee.
The term "haircut" refers to lenders getting less than what they are owed by the party. Quoting a person close to the talks, the daily said, "There is a real problem (creditors) will fragment into a number of splinter groups".
The restructuring is expected to involve an injection of fresh funds, the report added. Attributing to bankers, the daily said that Dubai World's overall debt burden including entities outside the restructuring process which involves $22 billion in outstanding debts is at around "USD 40 billion, rising to almost $60 billion with liabilities".
