Banker: Dubai World creditors offered extra 1%
Newswires report increased interest rate from rolled over debts
Dubai World offered to pay investors an extra 1% interest on top of the 1% officially announced as the conglomerate starts its climb back up to financial stability, a banker told a newswire on Thursday.
The doubled rate of return for the rolled-over loans comes amid crunch talks for banks and the beleagured institution that received a AED10 billion loan from Abu Dhabi last year following the defaiult of two of its subsidiaries.
The banker told Bloomberg that the banks are seeking a different rate for dirhams and dollars, although no comment was forthcoming from either Dubai World or the Dubai Department of Finance. The banks will be paid below market rates.
News of the progress in discussions for Dubai World’s debt helped the DFM index rebound from a month low yesterday prompted by uncertainties in international markets over the bail-out of Greece.
The index clawed back 1.5% of its value on Thursday, up to 1739, a rise of 25 points. Emaar and Drake & Scull also gained ground.
The rise was the biggest gains of the day for the region. The Muscat Securities Market has gained 22.78 points this afternoon to reach 6,830.37, followed by the Kuwait Stock Exchange at 16.90 to reach 7299. In Bahrain the All Share Index rose 11 points to reach 1591.
In Doha and Amman the respective stock exchanges both rose just over four points to close at 7547.41 and 2575.
The Tadawul in Riyadh, KSA, was the biggest loser, falling 44 points to finish at 6867.97, with the Abu Dhabi Stock Exchange closing down 0.86 at 2777.