Dubai’s debt debacle

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.

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Tags: Banking & Finance, Dubai debt, Dubai World, markets, nakheel, stocks

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4 Comments

Josef Tool on December 1, 2009 12:25 am

I live in Dubai for 2 years… leaving in June 2009. Even after all that has happened over the past 12-18 months there; these guys just keeping talking as if Dubai is travelling along like nothing wrong and with their heads stuck in the sand… the arrogant’s and naivety is shocking!
Ahmed on December 1, 2009 9:54 am

Josef- the fact that you can’t spell ‘arrogance’ or ‘naivete’ leads me to believe that you were one of the many underqualified, self-righteous, undereducated Brits who tried to make an easy fortune in Dubai and failed. The U.S. and the UK had systemic financial shocks greater than Dubai’s by far, but they have dealt with them just as Dubai is. Just because Dubai’s leaders wear headresses and are not white doesn’t mean they’re not proactive and policy-minded. Dubai will emerge stronger than before as the re-emerging capital of the Arab World.
Andrew on December 3, 2009 1:22 pm

With a name like Josef? Eastern European mate. The primary reason the US and UK have been hit so hard is well, quite simply, centre of world finance?

I do however wish a lot of the scrubbers from the UK would disappear back down whatever hole they came from, as I came out here to escape them in the first place.
Josef Tool on December 6, 2009 1:23 pm

Ouch boys… Just like many of you; the truth hurts; then you get all defensive and rude. Very common you must be.

Where I am from (you clowns) is immaterial.

And finally…Sorry Miss; if the incorrect spelling is all you’re got to throw back at me over my note… You need to leave Dubai too; as you have very little to offer. them.