The Dubai Debacle - revised

[clear eye]

From an article in The Guardian by Elena Moya December 2009 20.33 GMT, called Dubai World could sell assets to ease debt burden

Dubai World may sell off domestic and overseas assets as it attempts to rescue itself from the burden of $60bn (£36.5bn) debts, the emirate's government said today....

In comments that will underscore the emirate's rulers' attempts to distance themselves from Dubai World's problems, al-Saleh said that the assets belonged to the company, not the government....

Bondholders representing 25% of the sukuk bond due on 14 December are considering taking legal action against Dubai World.

The group is mostly formed by US-based hedge funds, including New York-based QVT.

These investors mostly bought their debt at high prices, on the hopes that the perceived support of the Dubai government guaranteed their investment. The bondholders are now furious after the government distanced itself from the holding company that has driven Dubai's astonishing economic expansion.

So, on the one hand Dubai World is not getting off scot-free and simply defaulting as some people predicted. On the other, the gov't is not bailing them out (despite having used Dubai Treasury money to finance Dubai World and calling it a "Sovereign Wealth Fund") and there will likely be some short and late repayment as other parts of the article explain.

[ixion]

1. lol... some capitalists

:rofl:

They by high-risk debt, and when they lose money, they cry like babies.

Caveat emptor, motherfu**er.

[valerief]

4. No, when they lose money, they raid the US Treasury. nt

[KansDem]

2. "...the emirate's rulers' attempts to distance themselves from Dubai World's problems..."

Sounds like they've been taking lessons from American CEOS...or prominent GOP figures.

Isn't any public figure held accountable any more? (except Bill Cinton)

[Dennis Donovan]

3. As a maritime historian, I am VERY concerned what they will do with the QE2...

They purchased her a year ago with the intent of converting her to a floating hotel permanently moored to the Palm Jumeirah. She's the last of the Ocean Liners built primarily for transatlantic route (QM2 was built primarily as a cruise ship that would make a few transatlantic runs a season).

I hope, for the sake of the old girl, she gets a new home and doesn't end up on the beach in Alang, India.:(