Dubai World has reached formal agreement with a substantial majority of creditors on its proposal to amend and extend the terms of its outstanding debt totalling $14.6 billion, the state-owned conglomerate said on Monday.

The company entered into discussions with a wide range of representative creditors with significant holdings of its debt for several months around a voluntary transaction to improve terms and conditions of the existing credit agreement for both the company and its lenders.

The new restructuring plan involves full, early repayment of 2015 maturities totalling $2.92 billion, extension of 2018 maturities to 2022, enhanced economics through increased pricing, introduction of amortisation targets, and additional collateral.

Dubai World has now made a voluntary arrangement notification under Decree 57-- legislation brought in by the Dubai government to administer the conglomerate's previous restructuring at the turn of the decade -- to amend its existing debt deal, it said in a statement.

The Decree requires that at least 66.67 per cent of creditors vote to approve the agreement and existing commitments from lenders means that this threshold has already been comfortably exceeded.

The company aims to continue to sign up more lenders to the agreement during the Decree 57 process, which in the ordinary course will take several months to complete, it said.

Throughout the process, business will continue as usual for the company and its subsidiaries all of whom will continue to meet their existing contractual obligations in the ordinary course, the Dubai World statement added. – TradeArabia News Service