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Dubai’s debt debacle
Authorities in Dubai claim the media over-hyped the emirate’s announcement of a six-month debt standstill for two of its major companies. But international bodies are still monitoring the situation.
November 30, 2009 3:35 by Aarti Nagraj
Many executives have also rallied their support for Dubai, claiming that the debt problem was exaggerated.
“Dubai should be given time to restructure its debt. I’m not going to lose sleep over this issue,” Riad Kamal, CEO of Arabtec told Reuters.
“I am very relaxed. Dubai has never defaulted and it will not default,” Khalaf al-Habtoor, chairman of al-Habtoor Group, told the agency. “I am confident the government will meet its commitments and help the companies.”
Michael Geoghegan, CEO of the HSBC Group, said in a statement that he was “confident that the leadership of Dubai and the UAE will overcome any short-term issues they face, which appear to have been somewhat sensationalized, and continue to lay the foundations for sustainable growth.”
But markets around the world have been affected by the problem, with crude oil prices falling to six week lows. Dubai World is estimated to have debts of around $60 billion, while Nakheel has a $3.52 billion Islamic bond (sukuk) maturing in December.
On Monday, Nakheel asked for all three of its listed sukuk’s “to be suspended until it is in a position to fully inform the market,” according to a statement on the Nasdaq Dubai website.