Creditors Want Dubai World to Sell Properties

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Creditors of Dubai World want the state-owned conglomerate to sell many of its high profile properties, including the Las Vegas City Center, the Atlantis hotel in Dubai and the Mandarin Oriental hotel in New York.

At a meeting last month in Dubai, lenders expressed concern that Dubai World, one of the investment arms of the Dubai government, was not moving quickly enough to raise funds to pay a $4.5 billion debt repayment due in 2015, the Financial Times reports.

About 90 banks and lenders agreed to a $25 billion debt restructuring in 2011. Now some of those lenders fear that Dubai World won't be able to make the first payment unless it sells key assets.

"Banks were saying there are still lots of assets to sell to meet the deadline," one attendees told the FT. "Dubai World, however, said 'we know what we want to do'."

Some lenders fear that Dubai World is simply working to force another restructuring under more favorable terms, the FT speculates. But the company may also be waiting for more favorable conditions before selling.

"The company can figure out a strategy for now," one restructuring specialist told the FT. "Creditors are stirring things up, but that doesn't necessarily mean it is the right thing to do."

Dubai World was one of the world's most aggressive investors before the market crashed in 2008. Its diverse holdings include entertainment company Cirque du Soleil and DP World, the giant port operator.

The list of creditors includes companies includes HSBC, RBS and Abu Dhabi Commercial Bank.

"Dubai World is behind in terms of the plan for realization of assets, but they've still got two years," another creditor told the FT.