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Three international banks said Wednesday that they were taking legal action against Dubai Group, a holding company owned by the emirate’s ruler with interests in property and financial services, after talks over its $10 billion debt restructuring failed to result in an agreement.
Commerzbank (CBK.XE), Royal Bank of Scotland (RBS) and Standard Bank (SBK.JO) said in a joint statement that the banks could not reach a viable solution “despite the banks’ goodwill and numerous long term concessions offered by the banks.” The three banks unexpectedly backed out of the debt restructuring talks about three months ago, despite advanced discussions between Dubai Group and its roughly 40 creditor banks.
“In the circumstances, Commerzbank, RBS and Standard Bank were unfortunately left with no alternative but to pursue the legal recourse available under the facility documentation,” the statement said. “We do however want to make clear that our preference was always to conclude an agreement without formal legal proceedings and we therefore remain open to such an outcome if an acceptable commercial resolution is forthcoming.”