Dubai World might sell assets to pay debt
DUBAI, United Arab Emirates - Dubai World, the cash-strapped conglomerate at the center of Dubai’s debt crisis, appears set to retrench. Yesterday, the emirate’s top finance official said the company may need to change course and unload assets as it struggles to pay lenders.
What gets sold remains uncertain. Clearer is the city-state’s position that the government won’t be responsible for Dubai World’s debts, renewing questions about its backing of other state-run companies.
“These are assets of a company, not assets of a government,’’ said Dubai Finance Department director-general Abdul Rahman al-Saleh, adding later that the restructuring was aimed at keeping Dubai World viable.
The comments appeared to cement concerns that Dubai was washing its hands of debts racked up by companies it created and backed during the city-state’s boom years earlier this decade. Easy money and unbridled ambition transformed the tiny sheikdom from desert hamlet to pulsing Arab boomtown.
The sale of any major Dubai World holdings would mark a stark about-face for the conglomerate, which repeatedly downplayed talk it might need to unload pieces of its empire.
That perception began to shift last week when the company said its restructuring would include an assessment of options to reduce debt, “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 UAE.
Davidson and others said they expected some of Dubai World’s overseas property would be among the first on the auction block.
A Dubai World spokeswoman declined to comment.