Emirates finance chief: Dubai can resolve new woes
May 30, 2010 2:51 by Samuel Potter
Dubai will ride out its latest financial troubles without a federal bailout for another major investment company seeking postponement of debt repayments, the Emirates’ finance chief said Saturday after the request raised new concerns about the city-state’s credit woes.
Dubai International Capital (DIC), an investment company controlled by Dubai’s ruler asked lenders for a three-month extension on repaying some of its debt. DIC did not provide details of the debt involved except to say the request involves “certain maturities.” The company has a $1.25 billion loan coming due in June.
Sultan bin Saeed Al-Mansoori, the Emirates’ finance minister, said the Abu Dhabi-based federal authorities were not “interfering” in DIC’s woes and predicted the company will not need major restructuring or a bailout to overcome its financial problems.
Federal aid and a significant makeover were required for Dubai World, after the city-state’s main investment engine shook financial markets last year when it couldn’t meet its substantial debt payments.
“I don’t expect a massive restructuring (of DIC),” Al-Mansoori told a news conference, adding that there was no “no need to overreact” to the company’s request on Thursday to postpone some of its debt payments until Sept. 30.
“I do believe they will be able to meet requirements,” Al-Mansoori said.
He praised Dubai World’s restructuring efforts. “I applaud them for the process taken to solve the (debt) problem,” Al-Mansoori said.
Last week the government-linked Dubai World said it had won support for its $23.5 billion restructuring plan from leading lenders. Dubai officials have since outlined the need for further financial reforms.
DIC is part of a holding company owned directly by Dubai’s ruler, Sheikh Mohammed bin Rashid Al-Maktoum. Its holdings include British hotel chain Travelodge, medical imaging equipment maker Alliance Medical and precision engineering company Doncasters Group.
On the future economic prospects for the oil-rich Emirates, Al-Mansoori said Saturday the country expects up to 3.2 percent growth this year, compared with 1.3 percent last year as the global economic crisis ended Dubai’s boom years.