Dubai World and its creditors have hit an obstacle in negotiations over a proposed standstill on the conglomerate’s $22bn (Dh80.8bn) of debt, The National reports.
Dubai World said in November that it would seek to delay debt repayments to 97 banks as part of a plan to give it time to restructure while preventing creditors from pursuing legal action to recover what they are owed.
But banks had yet to agree to standstill proposals from Dubai World and the Dubai Financial Support Fund, a government entity set up to distribute the proceeds of a $20bn bond programme to struggling state-owned firms.
Dubai World has received about $6.2bn in aid from the DFSF.
A central sticking point in negotiations has been the DFSF’s plans to take security in exchange for money that it would pump into Dubai World to keep up interest payments once the standstill was agreed to, the sources said.