Dubai Group LLC’s creditors are seeking an option to be repaid early as the investment company controlled by Dubai’s ruler reorganizes $6 billion of bank debt, according to three people familiar with the talks.
Under the early exit proposal for the 10-year debt restructuring, banks can choose to be repaid the market value of their loans after five years, said two of the people, who asked not to be identified because the information was private.
Banks opting for the exit clause are also seeking a guarantee that Dubai Group will have the cash to repay in case it can’t raise funds by selling assets, some of which are considered indivisible, one of the people said.
Dubai Group, controlled by Dubai Holding LLC, is one of several companies in the emirate reorganizing debt after the global credit crisis eroded the value of its assets.
Royal Bank of Scotland Group Plc, Commerzbank AG and Standard Bank Group Ltd. abandoned 18 months of restructuring talks with the investment company after failing to reach an agreement, two people familiar with the matter said on July 10.