WRAPUP 5-Dubai World ready to use tribunal for debt deal

* Some lenders will likely rebel against deal terms

* Dubai World would use tribunal to bring them into line

* EXCLUSIVE-Reuters sees deal document [ID:nLDE66L1HM]

* Meeting to present all creditors with final proposals

* First all-bank meeting since December

(Recasts with banker reaction to unchanged terms)

By Nicolas Parasie and Shaheen Pasha

DUBAI, July 22 (BestGrowthStock) – Struggling state conglomerate
Dubai World [DBWLD.UL] is ready to force any rebel lenders back
into line if they balk at the terms presented to them under a
$14.4 billion debt restructuring plan.

The indebted conglomerate would use a special tribunal set
up by decree to hear disputes over the delayed repayment plan, a
source familiar with the matter said ahead of a key creditor
meeting in the emirate. A banker in the meeting said that was
the message lenders got.

“Basically they said ‘this is the deal and the alternative
is we’ll invoke the decree and then you’ll have to wait a long
time for your money back’,” said a Gulf-based creditor bank.

A copy of the closely guarded deal document seen by Reuters
showed how use of the tribunal would work, and outlined the
potential cost to lenders. [ID:nLDE66L1HM]

Thursday’s meeting took place in a lavish pink resort hotel
at the tip of a man-made palm tree-shaped peninsula — one of
the ambitious projects that left Dubai gasping for cash after
the global real estate bubble burst in 2008.

The Gulf Arab emirate is labouring under more than $100
billion of debt, including the $14.4 billion Dubai World debt
under discussion on Thursday.

“It’s unlikely all 73 banks will accept terms, which means
it will likely go to a tribunal,” the source said, adding that
if the majority support the plan, the tribunal can compel
holdouts to get in line so the restructuring can proceed.

Dubai set up the special tribunal to be arbiter of disputes
between lenders and the stricken state company.

A deal has already been agreed with core lenders
representing 60 percent of the loans.

The company, whose operations include real estate, ports and
private equity investments, needs two-thirds acceptance to be
able to take the deal to the tribunal in the event of a
rebellion. Any lender can use the tribunal, but none has yet.

The document seen by Reuters showed that the terms presented
were unchanged from those agreed by the core group. It revealed
for the first time how asset sales would fund the revised
repayment schedule, along with a warning that lenders would come
off much worse if Dubai World ends up in liquidation.

According to a source in the meeting, one banker complained
that lenders to Dubai World subsidiary Nakheel [NAKHD.UL] were
getting a better deal. [IDnLDE66D0GO]

A Dubai World statement said it expected to complete the
restructuring in coming months.
Take a Look on [ID:nLDE66K1NB]
Graphic on debt plan http://link.reuters.com/bam45k
Factbox on Dubai’s syndicated loans [ID:nLDE66K1A7]
EXCLUSIVE-Document reveals price of failure [ID:nLDE66L1HM]


Bankers picked their way to the meeting past holidaymakers
enjoying cut-price deals at the resort, which boasts a huge
aquarium in one air-conditioned lobby protecting guests from the
searing summer heat outside.

Accountancy firm Deloitte’s Aidan Birkett has become the
public face of Dubai World and led the meeting. Chairman Sultan
Ahmed bin Sulayem, a childhood friend of Dubai’s ruler Sheikh
Mohammed bin Rashid al-Maktoum, is rarely seen in connection
with the company since the debt crisis unfolded.

The Dubai government is the ultimate owner of Dubai World,
part of the network of state firms known locally as “Dubai Inc”.
Oil-rich Abu Dhabi, the capital of the United Arab Emirates,
stepped in last year to help Dubai with its debt burden.

The seven-strong core group of Dubai World lenders has
agreed to reschedule repayment of loans due in the next few
years into a five to eight-year package paid at between 1 and
3.5 percent. [ID:nLDE64J06Z]

Investors in the region hoped the meeting, the first
all-bank gathering since December, would pass off without any
negative publicity.

“As terms stand at the moment it’s already priced in, but
there’s downside risk if some banks refuse to sign or hold out
for better terms,” said Matthew Wakeman, EFG-Hermes managing
director for cash and equity-linked trading in Dubai.
The seven-member coordinating committee of banks comprises
HSBC (HSBA.L: ), Lloyds (LLOY.L: ), Royal Bank of Scotland (RBS.L: ),
Standard Chartered (STAN.L: ), Bank of Tokyo Mitsubishi (8306.T: ),
and local lenders Emirates NBD (ENBD.DU: ) and Abu Dhabi
Commercial Bank (ADCB.AD: ).

Stock Report

(Additional reporting by Rachna Uppal; Writing by Andrew
Callus; Editing by Samia Nakhoul)

WRAPUP 5-Dubai World ready to use tribunal for debt deal