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Dubai, United Arab Emirates - Dubai World may unload some assets to raise cash, a senior government official said, reflecting a potential about face for the heavily-indebted conglomerate behind much of Dubai's boom.
Dubai Finance Department Director-General Abdul Rahman al-Saleh did not say which pieces of the company are for sale. However, he emphasized that the assets in question would be Dubai World's alone - underscoring the government's position that it is not responsible for debts racked up by a company it created and backed during the city-state's boom years.
"Like any company that has commitments, part of getting liquidity is selling some assets. Of course local or foreign assets," he said in an interview aired by al-Jazeera on Monday.
A Dubai World spokesperson declined to comment.
The sale of any major Dubai World holdings would mark a stark change for the conglomerate, which repeatedly downplayed questions it would need to unload pieces of its global empire even as Dubai's financial concerns grew more acute over the past year. The company's roughly $60bn in debt came from a multi-year building and buying spress fuelled by access to cheap loans.
That perception began to shift last week, when the company said tersely that its restructuring would include an assessment of options to reduce its debt load, "including asset sales".
"This is the inevitable next step, really," said Christopher Davidson, a professor at the University of Durham who has written extensively about the history and politics of the UAE.
Al-Saleh's latest comments are the clearest sign so far that the city-state's leadership is growing more comfortable with the idea of selling off pieces of the company.
Dubai's government shocked global markets when it announced plans to restructure the debt-laden company on the eve of an Islamic holiday in the Middle East and Thanksgiving in the United States. The news stoked fears, at least temporarily, that the world's economic recovery was on shakier footing than many believed.
The government said the company would request a delay in paying some of the $60bn in debt coming due. Included in that restructuring was $3.5bn worth of bonds that must be paid or refinanced by next week.
The sheikdom's finance chief said on Monday the primary aim of the restructuring is to ensure the company remains viable for years to come.
"It is premature to announce any plans now, but the main goal is that Dubai World will continue in the future as a company with a new framework to face challenges," al-Saleh said. He did not elaborate.
Al-Saleh's comments sent Dubai stocks tumbling, with the city-state's main bourse plunging 5.8 percent at the close on Monday.
The company runs the world's fourth-biggest seaport operator, DP World, with operations on six continents. Its wide-ranging investment portfolio includes luxury retailer Barney's New York, a stable of high-end US hotels, and stakes in Las Vegas casino operator MGM Mirage and Cirque du Soleil. Its holdings are so diverse and spread out that its slogan boasts: "The sun never sets on Dubai World."
At home in Dubai, the company's property arm Nakheel built man-made islands in the shape of palm trees and a map of the world. The iconic British cruise liner Queen Elizabeth 2 sits unused in a downtown Dubai port awaiting renovations to turn it into a floating hotel.
Dubai World subsidiary Dubai World Africa owns a number of properties in South Africa, including wild reserves like Shamwari in the Eastern Cape.
The V&A Waterfront is owned by Dubai World Africa and British group London & Regional, which each have a 37.5% stake, while the remainder belongs to a BEE consortium.
- AP
