The Dubai government and its entities are facing debts of around $80 billion, and authorities have assured investors that the emirate will meet its financial obligations.
November 11, 2009 3:32 by kippreport
Perhaps the biggest debtor is the state-owned conglomerate Dubai World, which according to reports has between $60 billion and $40 billion in debt. Under pressure right now is Nakheel, which has to pay off a $3.52 billion Islamic bond (sukuk) maturing on December 14. Nakheel is part of Dubai World.
Last month, two bankers familiar with Dubai World told Bloomberg that a part of the money needed to repay Nakheel’s sukuk may be “raised from a bond sale and the rest from local lenders.” They also said that some of Nakheel’s bondholders may agree to delay the bond’s maturity.
The developer also repaid a $1.2 billion debt to a consortium of bankers in October, although the bank notes were only due to mature in November. The banks include Emirates NBD, Mashreqbank, Noor Islamic Bank and Samba of Saudi Arabia.
“Perhaps it wanted to generate some goodwill,” Mohammad Rajid Kamran, deputy general manager and head of global financial institutions at Emirates NBD, told The National.
Another government-owned entity, Dubai Holding reportedly has debts of around $2.44 billion.
But the company has been doing well, and last month, repaid its $250 million loan to BNP Paribas. Dubai Holding also said that it had paid up a $300 million loan its property unit, Sama Dubai, had taken out.
Last week, Dubai’s Finance Department said that the city had repaid a $1 billion sukuk issued by the Dubai Civil Aviation Authority bond, which matured on November 4.