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Deep in debt
Istithmar World may have borrowed up to 90 percent of the money it used to buy stakes in companies worldwide.
September 14, 2009 10:21 by Dana El Baltaji
Since 2003, Istithmar invested vigorously in high profile companies worldwide, including in Perella Weinberg Partners, the Queen Elizabeth 2, Cirque du Soleil, Barneys and Yacht Haven Grande in the Caribbean.
Nakheel, another subsidiary of Dubai World, revealed recently its parent company owes as much as $60 billion, approximately two-thirds of Dubai’s reported debt of $80 billion.
Last week, the Ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum, said he is confident the government will pay off its $4.52 billion maturing debt at the end of 2009.
“I assure you we are alright, the UAE is alright, and we are not worried,” he said at his Zabeel palace in Dubai, when reporters asked if Dubai will meet its financial commitments this year.
In early 2009, the government created a $20 billion fund to help state-owned companies pay their debts. The nation’s central bank purchased half of the bonds to help Dubai’s economy.
“I don’t think we made any mistakes,” Sheikh Mohammed said last week. “The crisis came for everyone, not just Dubai. People had to fight.”
“The UAE is strong; it is like a plane facing headwinds. Now the headwinds are slowing down, so the plane will reach its destination more quickly.”
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