Dubai World: Sinking In Its Liabilities
November 27, 2009 8:15 AM
Dubai World, a subsidiary of Nakheel, has $59 billion liabilities on its books out of the total Dubai Debt of $80 billion.
In the current recessionary times, the company is finding it difficult to meet its obligations and has appointed Deloitte as Consultant for Rescue. As a part of restructuring exercise for Dubai World, Dubai has asked creditors of the company for permission to delay its repayment of debt. The official announcement sent the cost of insuring Dubai’s Debt against default soaring in the CDS market and Bond prices tumbled.
It is understood that Nakheel, the developer of palm-shaped islands owned by Dubai World, has a $3.5 billion Islamic bond maturing on December 14 and more debt worth 3.6 billion dirhams ($980 million) due on May 13, 2010. Nakheel Islamic Bond Prices also fell indicating high risk expectations of investors.
