Dubai World is reported to have received support from its creditors ahead of its October restructuring deadline for its $39.9bn (£25.7bn) of debt, which could see it avoid a fire-sale.
The group, which has become a cautionary tale of debt-based expansion, has been in talks with banks concerning the renegotiating its debt and is thought to have reached agreement over a plan which could see it hold onto assets until their values recover.
It was reported last week that Dubai World was prepared to sell assets including previously ring fenced ports firm DP World in a bid to raise as much as $19.4bn to repay creditors.
According to the group's restructuring document, seen by Reuters, its stake in the Atlantis Hotel was amongst the assets it was considering selling.
The document was said to show that Dubai World's present asset values were between $6.4bn and $10.4bn, with projected future asset values over five to eight years increasing to between $15.1bn and $19.4bn, implying that sales may not be imminent, as values are expected to rebound. Should the group find an alternate way to meet its debt requirements it is thought it could avoid any disposals.
Istithmar, the group's investment arm, saw its portfolio likely to raise $3.2bn to $4.5bn in over the next five years, however the document was thought to say that a sale sooner rather than later could net only $2bn. In early August Istithmar raised £173m in London with the sale of office assets, and is thought to be looking at more disposals in that sector.
The group's hotel assets were shifted from the group's development arm, Nakheel to Istithmar as part of its restructuring a year ago.
At that point, the Nakheel Hotels included: the Mandarin Oriental and W hotels in New York and the W in Washington DC, and the luxury liner Queen Elizabeth 2, bought for $100m, which it planned to convert it into a luxury hotel.
The assets held by Istithmar included the Kempinski Djibouti Palace, a 33.14% stake in IHI, a 50% stake in the Fontainbleau Miami, a stake in Kerzner International, a 50% stake in Atlantis, the Palm and the Mandarin Oriental in New York.
The group has, despite most acquisitions being beset with an assortment of trading issues, debt defaults and other funding problems, held onto much of the estate.
Asset by asset, the W New York Union Square has been the biggest loss so far, having changed owner to Host following a foreclosure sale, although Istithmar has the right to acquire a stake in the Host-led venture buying the property, after a US judge's ruling this week. Istithmar was forced to accept $2m for the hotel at the foreclosure auction, leaving it with a $283m loss.
The group retained its W in Washington DC, which it acquired for $150m, as well as the Mandarin Oriental in New York which it paid $340m for, but was estimated to have dropped to $123m by the end of last year, according to credit rating agency Realpoint.
Its other US holding, Fontainebleau Miami Beach, which it paid $375m for a 50% stake in towards the end of 2008, has been subject to reports of issues repaying a $620m loan for its renovation, but is still with Istithmar.
Outside the US, stronger trading has helped it hold onto the Kempinski in Djibouti and Cape Town's V&A Waterfront.
In London it still holds a 33% stake in IHI, including a stake in the Corinthia Metropole, which it bought in partnership with IHI and IHI's fellow shareholder, the Libyan Foreign Investment Company, for $254m.
Closer to home, the group has a 50% stake in the Atlantis hotel at the Jumeirah Beach resort. Associated with this holding is a stake in Kerzner International, with whom the group is also developing the One & Only Royal Mirage Jumeirah Beach, due to open in October.
In 2006, a consortium of investors including Dubai World, a Goldman Sachs fund and Colony Capital raised $3.2bn to take Kerzner International private. Reports in the Financial Times suggest that the debt is due in September. It is reported that the group has hired Blackstone to advise it.
At the height of Dubai World's expansion it was held up as an example to developing states, with executives from the group travelling to countries including Russia and Brazil to advise on how to replicate its perceived success. Now it risks losing much of its debt-ridden holdings to repay its many creditors, later, if not sooner.
However, with the banking committee considering Dubai World's restructuring reported to have backed the plan, should the global recovery continue apace then it may find they also back the retention of much of its estate too.
HA Perspective: Dubai World is almost the polar opposite of Hongkong & Shanghai: Breakneck growth funded by what now appears as break the bank funding structures.
The Dubai situation, despite appearing to be one of the most overblown of the property bubbles around the world, looks set to deflate slowly in a pattern mirrored elsewhere.
This particular desert odyssey looks to be of restructuring and refinancing rather than foreclosure and firesale.