CorporateGovt promises to bring Dubai World out of crisis
The Dubai government today said it fully expected the fallout from its massive debt problem and promised to pump in all necessary resources to ensure long-term success of Dubai World.
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"The government is spearheading the restructuring of this commercial operation in the full knowledge of how the markets would react," Dubai Government"s Supreme Fiscal Committee Chairman Shaikh Ahmad Bin Saeed Al Maktoum said in a statement.
He said the government"s intervention in Dubai World was carefully planned and "reflects its specific financial position".
"We want to ensure resources are deployed in the full knowledge that they are used to enhance the businesses of the Dubai World Group, build on the restructuring that has already been taking place and ensure long term commercial success," Gulf News quoted Shaikh Ahmad as saying.
Dubai World, an investment company that manages and supervises a portfolio of businesses and projects for the Dubai Government, yesterday said it would ask creditors for a "standstill" on paying back its $60 billion debt until at least May, 2010.
Markets across the world went into a tailspin after the report. The FTSE 100, suffered its worst single-day dip since March on Thursday. Shares in Asian exchanges also got affected by the tremors of Dubai debt.
Shaikh Ahmad said, "We understand the concerns of the market and the creditors in particular. However, we have had to intervene because of the need to take decisive action to address its particular debt burden."
The real estate arm of Dubai World -- Nakheel, whose projects include the palm-shaped island in the Gulf, shoulders the bulk of the said debt.
Shaikh Ahmad pointed out that the unprecedented growth in Dubai and across the UAE over the past decade has helped lay the foundation for what is now a broad-based sustainable economy beyond just natural resources.
"The economic fundamentals, such as our highly developed infrastructure, strong transport and communications hub and regional financial centre will ensure Dubai remains an attractive regional market," the minister added.
He said further information would be made available early next week.