linked indebted conglomerate Dubai World intends to ask creditors for a six-month standstill on $22 billion in debt this month, until it completes restructuring, an Arabic-language daily said on Wednesday. According to a report published in the Al Ittihad newspaper, Dubai World will request a debt freeze from the end of February, which would cover a bond repayment of $980 million from property unit Nakheel. A spokesman for Dubai World said the company has not released a statement on a standstill and declined to comment further. Dubai World rocked global markets last year after it said it would request a standstill on billions in debt repayments at its two property units, Nakheel - developer of the emirate's palm-shaped islands - and Limitless World. “This important step by Dubai World this month will represent the most significant transitional phase in the group's negotiations with creditors,” sources told the paper. A last minute intervention from neighbor Abu Dhabi staved off a default on a major Nakheel bond payment on Dec. 14, but further financial help is conditional upon a standstill agreement. Dubai World has access to about $4.9 billion remaining of the funds provided by Abu Dhabi, and the financial support will cover working capital and interest expenses, while a restructuring plan is hammered out. A meeting was held between Dubai World and some 97 creditor banks on Dec. 21 – bankers said at the time the firm may ask for a standstill in January. A $1.2 billion Islamic loan at Limitless is due for maturity in March, the next major loooming repayment, which Dubai World may seek to roll over, but it is unclear whether banks will agree without a standstill agreement in place. An unofficial coordinating committee of seven creditor banks is negotiating between lenders and Dubai World.
