Sheikh hits out at the reaction to Dubai crisis
THE RULER of Dubai yesterday slammed the reaction of international investors to the emirate’s debt crisis, claiming: “They do not understand anything.”
A day after the finance minister said the government would not back debt-laden Dubai World, Sheikh Mohammed bin Rashid al-Maktoum defiantly said: “We are strong and persistent. It is the fruit-bearing tree that becomes the target of (stone) throwers.”
His comments came shortly after Sheikh Khalifa bin Zayed al-Nahayan, President of the United Arab Emirates and the ruler of Abu Dhabi, said the UAE economy was in good condition, after Dubai World rocked world markets by asking for a freeze on its debt repayments last week.
Dubai World issued a statement yesterday for the first time with detailed plans for its debt obligations. The company said it was in constructive talks with creditors about restructuring $26bn of its $59bn debt pile.
Bondholders and creditors have clubbed together to form a series of ad-hoc representative groups amid concerns that a six month standstill could lead to a much more radical restructuring. They are understood to be trying to ensure they have enough representation to veto any move they disagree with.
The restructuring will only relate to certain subsidiaries, including Limitless Worlds and Nakheel, the troubled property company responsible for the emirate’s palm-shaped islands. Some $6bn of the debt relates to Nakheel.
DP World, P&O Ferries, Jebel Ali Free Zone and the Istithmar investment fund are excluded from the current process and Dubai World said these businesses remained on a “stable financial footing”.
The statement helped markets in London, where the FTSE closed 121.49 points higher at 5312.17. But Dubai closed down 5.61 per cent and Abu Dhabi fell 3.57 per cent.