How skier avoided slippery slopes

The National talks to Aidan Birkett, who was appointed the chief restructuring officer of Dubai World last November.

Aidan Birkett was appointed the chief restructuring officer of Dubai World last November. He has 30 years' experience at the sharp end of corporate rescues, having worked on such high-profile cases as the Robert Maxwell companies' bankruptcy, Eurotunnel, Cable & Wireless and Wembley Stadium. He is in charge of corporate finance at the accounting firm Deloitte. Mr Birkett, 57, is a keen skier but missed last season because of his duties at Dubai World. He talked to Frank Kane after yesterday's deal was announced.

q What prompted this deal to be announced today [Thursday]? Was it the fact you've got acceptance of 60 per cent? a That's 60 per cent of value, not 60 per cent of the number of banks. Basically we got the agreement of the co-ordinating committee (Co-com), seven banks, on Tuesday to the headline terms, and decided to announce today [Thursday]. It's all been bashed through since March when we announced the proposals.

Was that a difficult process? @Body-Answer2 :We said back in March the fundamentals would not change and they haven't, it's broadly the same deal. There's been some refinement and we've injected some optionality to accommodate banks with different objectives ? Was that optionality included to overcome the objections of UAE banks? @Body-Answer2 :No, not really. All of them wanted some flexibility. Some wanted guarantee and underpinning of value, others wanted cash and interest.

Some people today said Royal Bank of Scotland (RBS) and Abu Dhabi Commercial Bank (ADCB) were the toughest in negotiations. Can you comment? @Body-Answer2 :Well, I can't talk about specific banks, but it was a negotiation and there is an ebb and flow in all negotiations. Now it's unanimously accepted in principle by the Co-com [which includes RBS and ADCB]. How do you see progress with the remaining 40 per cent? Can you foresee problems?

@Body-Answer2 :We have to conclude detailed terms with all creditors, but remember that the Co-com banks are the legal representatives of all creditors. No doubt they've been in contact with the others in the course of these negotiations and gauged their opinion before this announcement. How will you seek to persuade any banks which hold out? @Body-Answer2 :You will be familiar with Decree 57, no doubt, which gives us the power to go to the tribunal set up by the Government of Dubai as part of the restructuring. But we want a consensual deal, of course. If we get to a level of acceptance of, say, 80 per cent of value, I'm sure some of those creditors will ask us to use the tribunal process to get a deal. It would be good to get it without recourse to measures like that and I think we've got a good chance of doing that.

What about progress with Nakheel contractors and customers? @Body-Answer2 :That's a separate process. Nakheel has its own board and they are conducting detailed negotiations ?. I was never going to sit in and talk details. Strategy, yes, but detailed implementation, no. It has to be done by the company. Anyway, I don't speak Arabic. Can you explain the shortfall guarantees in today's announcement?

@Body-Answer2 :I remain confident Dubai World's assets will exceed its debts, but if anything happens at the end of the day to change that, the Government has undertaken to pay the difference. It has eight years to get those sums right. Does that imply disposals? @Body-Answer2 :Yes, we have an asset realisation plan in place over the eight years. It's flexible and opportunistic, so that if we get an offer for something at a good price we can take advantage of it and do deals as they arise.

Can you explain the payment-in-kind element? @Body-Answer2 :Instead of regular cash repayments, the interest gets rolled over and it all gets repaid at the end of the eight-year period. It's one of the options. Dirham lenders can take a mix of all three. The strategic thinking behind your restructuring was: fix Nakheel and you fix real estate; fix real estate and you fix the Dubai economy. Are you still confident of that strategy?

@Body-Answer2 :Yes, I am. We've seen some analysts calling the low of the property market recently, and if you go by the number of available seats on planes to Dubai, there isn't much wrong with it anyway! But there is no doubt Nakheel is a seriously big element of the Dubai real estate business. The crisis in the euro zone broke right in the middle of your negotiations about the restructuring proposals. Did it have any effect?

@Body-Answer2 :Maybe behind the scenes it might have weighed on the creditors' minds, but it never appeared from where I sat. The big question: will the restructuring be completed in time for the ski season? @Body-Answer2 :I'd like to say that's guaranteed this year. @Email:[e-mail]