Dubai is not seeking preferred creditor status in the restructuring process of state-owned Dubai World, a government spokeswoman said on Monday, removing one stumbling block in talks with lenders. “All creditors, including the government, will be treated on an equal basis,” a government spokeswoman told Reuters. The Dubai government, acting through the Dubai Financial Support Fund (DFSF), has given the conglomerate about $6.2 billion over the past 12 months and plans to provide more. Collateral for further aid was cited as an impediment to a deal over Dubai World's debt burden as it would make the DFSF a preferred creditor in the event of an insolvency. Dubai World is still negotiating the terms of a $22 billion debt restructuring plan. The firm rocked global markets in November with plans to request a delay in repaying $26 billion in debt linked to its main property units Nakheel and Limitless World. It staved off default on a $4.1 billion Islamic bond linked to Nakheel, after a last minute bailout from Abu Dhabi. On Monday local newspaper The National said the Dubai government would “take its share of any exposure” in the restructuring of Dubai World, citing a person familiar with the talks between the conglomerate and its creditors. “If it (helping international banks to recover from the Dubai World restructuring) will be at the expense of the Government of Dubai, then so be it,” the source told The National. “That stops short of saying they (the banks) will get full recovery, but it means the government will take its share of any exposure,” the source said. In Abu Dhabi, the head of the Arab Monetary Fund (AMF) said he expected Dubai to reach a speedy resolution on the debt talks to limit any further damage to their image.
