Dubai World, which has interests in transport and logistics, ports, real estate and financial services, has been trying to restructure $23.5 billion in debt.

The Dubai government said it would fund the Dubai World investment with its own capital and with $5.7 billion that remains from a loan the government of Abu Dhabi had made available.

In a statement, Dubai World presented its restructuring plan, which includes converting $8.9 billion of debt and claims into equity and injecting $1.5 billion into the firm to fund working capital and interest payments. Two tranches of new debt maturing in five and eight years will also be issued as part of the proposed restructuring.

The deal is subject to approval by Dubai World’s creditors. “The restructuring process is expected to take several months to implement,” the government statement said.

Separately, Dubai’s government will provide $8 billion of fresh cash directly to Nakheel to fund operations and settle liabilities. And the government has proposed to convert its $1.2 billion of Nakheel debt into equity.

“The plan enables Nakheel to offer creditors 100% of agreed amounts owed and to fulfill its obligations to customers through the prompt completion of near-term projects,” the firm said in a statement.

In November, Dubai World shook up world markets when it said it was seeking to delay payments on its debt. This signaled investors about sovereign-debt risk, the prospect that governments might not be able to fund their debts after the credit crisis of 2008.

The following month, Abu Dhabi put up a $10 billion loan to Dubai to help Dubai World fund its obligations