Dubai world in $23.5 b debt deal with banks

The deal, which has no new financial aid from the government, must still be approved by banks outside the core negotiating panel, Dubai World said on Thursday.

“We are not entirely happy but we are in a no-choice situation. Under the circumstances, this seems the best deal possible, even though it is not entirely satisfactory,” said a banker at a Gulf-based lender outside the core group. Dubai, has struggled to bring its debt burden, estimated at $101 billion, under control.

The Gulf Arab emirate used massive amounts of leverage to transform itself into a trade and tourism hub, but the global financial crisis and a collapse in oil prices in 2008 brought an abrupt end to a six-year boom.

The emirate stunned global markets last November when it said it would delay repayment of $26 billion in debt linked to Dubai World and its property units, Nakheel and Limitless. Dubai unveiled a $9.5 billion rescue plan in March.

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