Dubai sends message with Dubai World reshuffle
Dubai World board change seen as signal of serious intent; New directors are close to Dubai ruler Sheikh Mohammed; Dubai distanced itself from Dubai World debt last year.
December 15, 2010 11:16 by Reuters
Sheikh Ahmed, he said, is known as someone who delivers.
Above all, experts say, the reshuffle sends a message that Dubai World remains a nagging concern for Sheikh Mohammed — who appeared to be in denial about the extent of Dubai’s debt problems when they first became public last year. It also shows that he is serious about putting Dubai World in order as it moves into the next phase of massive restructuring.
Last year Dubai’s government tried to distance itself from Dubai World’s debt, saying the entity was not an arm of the state and had never guaranteed its borrowings.
But this week’s reshuffle means it is now putting its clout and name behind the firm.
“Now that the restructuring of the company’s liabilities is nearly completed, and with the new board in place, we can look forward to a brighter future,” said a statement from Sheikh Ahmed’s office.
“Top of the agenda for the new board will be to work with the other boards of the various entities within Dubai World to achieve optimal performance, and to ensure that the value of those assets is suitably unlocked,” it said.
Dubai’s liabilities are estimated at around $115 billion, with some $30 billion in bonds and loans owed by state-linked firms slated to mature in 2011-2012. Debt problems in Dubai, which accounts for more than 32 percent of the UAE’s economy, have slowed the Gulf Arab state’s economic recovery in 2010.
Dubai officials estimate the emirate will grow 2.3 percent this year — a more optimistic forecast than the IMF’s projection for 0.5 percent growth.