Plea to delay Dubai repayments

DUBAI - Dubai World, the state-owned holding company in talks to renegotiate about US$26 billion ($37 billion) of debt, will ask banks for permission to delay loan repayments when it presents a plan to creditors this month, said three bankers.

Banks may be able to avoid a so-called haircut, where they receive less money than what they're owed, if they wait to be repaid, said two of the bankers, who declined to be identified. The banks may also receive a guarantee from Dubai's Government, one banker said.

Dubai World and its Nakheel and Limitless real estate units used loans to finance real estate projects such as palm tree-shaped islands off the emirate's coast, which they struggled to refinance amid the credit crisis. Dubai World said it would seek to delay repaying all loans until May, sparking the biggest plunge in developing-nation stocks.

"The proposal will be a meaningful one," said Saud Masud, Dubai-based head of Middle Eastern research at UBS.

Dubai World's advisers are asking the Dubai Financial Support Fund for money to fund interest payments on the loans in the meantime, the bankers said.

- BLOOMBERG