Dubai World restructuring: international reaction
International media reacts to the Dubai World announcement
The announcement that Dubai World will ask for a 'standstill' on financial obligations until May 2010 has made headlines around the world. Here's what some of the major papers and agencies around the globe are saying.
The standstill will affect a $3.5-billion bond that Dubai World real-estate subsidiary Nakheel was scheduled to repay next month. The bond was seen as a crucial test of Dubai's ability to pay its debts, amid a real-estate market crash that has ricocheted across the emirate's once-booming economy. Dubai World, in the spring, signaled a restructuring of the bond was an option, but hasn't provided details since.
The Wall Street Journal (US)
Bankers and analysts in the Gulf reacted with dismay to the announcement. One senior local banker at a bank with exposure to Dubai World said he believed it could technically obtain a standstill only with the agreement of creditors, but said he had received no information from Dubai World. The announcement came hours before the start of the Eid al-Adha holiday and the UAE national day celebrations, which will see the region shut down for more than a week.
Financial Times (UK)
Dubai is showing signs of recovery on the back of global economic optimism. However, restructuring Dubai's government-linked debts remains a top priority as the government seeks to assure a rebound for its trade, tourism and services-focused economy and recover from the precipitous property crash.
Al Jazeera (Qatar)
Dubai has been smart to prove that it can still raise money. At the same time as asking creditors for more time, Dubai announced it had raised a further $5 billion tranche of its $20 billion emergency support bond from two government-owned banks in Abu Dhabi…anyone with a long term interest in Dubai should be pleased that the emirate is biting the bullet.
The Telegraph (UK)
The subscription by Abu Dhabi banks indicates that the oil-rich emirate is prepared to help ease Dubai's financial woes, as private sector interest in lending to Dubai appears limited.
Investor concern is growing because the emirate hasn’t disclosed how it will pay more than $9 billion of debt coming due in the next four months.
Some parts of Dubai World remain strong, in particular DP World, the third-largest international ports operator. But those parts of the business that were founded on the property boom, and Nakheel in particular, are likely to continue to struggle until the property market recovers and construction can begin again in earnest.
The Times (UK)