Dubai World refuses to sell assets cheaply: report

[joeblow]

Dubai World refuses to sell assets cheaply: report

http://news.yahoo.com/s/afp/20091129/bs ... 1129130639

Sun Nov 29, 8:05 am ET

DUBAI (AFP) – Dubai World, the heavily indebted United Arab Emirates conglomerate behind plunging global markets, is refusing to sell off its assets cheaply, a senior company official said in a report on Sunday.

"The group has categorically refused in recent months to sell several properties and investments at low prices," the official whose name was not revealed told Al-Ittihad, a state-run Abu Dhabi daily.

"The sale of these assets should be on a fair, commercial basis, allowing the group to achieve its strategic long-term (goals) away from cyclical economic pressures," the source was quoted as saying.

Among the conglomerate's key assets are the QE2 cruiseliner and the Turnberry golf course in Scotland.

Dubai, one of the UAE's seven city states, said Wednesday it intends to request a "standstill" for at least six months on the maturing debt of Dubai World, its largest and most-indebted state-run holding.

Global stock markets sank on the news, with investors fearing a possible default by the emirate and its quasi-state corporates -- liable for about 80 billion dollars -- could cause a wider debt crisis.

But the source said a six-month moratorium would give the time needed to restructure the holding company under the supervision of a supreme committee charged with leading the emirate out of the crisis.

The restructuring would focus on "real estate and foreign investment units that are most affected by the global crisis, with the exception of DP World, which has posted good results."

A previous restructuring in October saw the holding company reduce staff complements in its companies around the world by 15 percent and in Dubai by 25 percent.

Dubai World said at the time that this would result in 800 million dollars of savings during the next three years.

DP World, a leading global port operator, said in January it was reviewing its expansion plans and putting a freeze on hirings due to a slowdown caused by the global financial crisis.

[HHAndy]

Rothschild appointed to help sell Dubai World assets

http://www.telegraph.co.uk/finance/busi ... ssets.html

Rothschild appointed to help sell Dubai World assets

Bankers from Rothschild have been appointed to help restructure Dubai World with a mandate to dispose of some of the stricken conglomerate's famous assets.

By Louise Armitstead and Richard Spencer in Dubai
Published: 12:01AM GMT 28 Nov 2009

Paul Reynolds, head of Rothschild's advisory operations in the Middle East, was this week asked to work for the Dubai government's chief restructuring officer alongside Aidan Birkett of Deloitte, who was appointed on Wednesday.

The team is tasked with assessing the group's assets, which is likely to result in a large scale sell-off of assets as varied as the QE2 cruise liner; Turnberry, the golf course that hosted this year's Open Championship; and a raft of properties.

A spokesman for the Dubai department of finance confirmed that all options and asset sales would be considered, except for the DP World subsidiary that bought P&O, the British ports company. "I'm sure all of the assets of Dubai World will be reviewed," he said. "The QE2 is one of them. It's part of the restructuring process, though it's too early to say whether there's any sale in mind."

The neighbouring emirate of Abu Dhabi is seen as one of the main buyers of Dubai's assets. Last year when rumours about Dubai's debt problems first started, sources said Abu Dhabi had offered to buy Emirates but Dubai had so far refused to part with its flagship carrier.

Abu Dhabi is also said to be interested in Emaar, the property company that owns the Burj Dubai skyscraper, the Dubai Mall shopping centre, and Dubal, Dubai's aluminium company.

However, the assets in Dubai World are more likely to be sold first. The group's biggest problem area is thought to be Nakheel, its property arm that owns the Palms, the ambitious man-made islands. Nakheel also has two hotel chains, one of which owns the Turnberry Hotel.

Dubai World's venture capital arm, Istithmar, owns stakes in global assets including Barneys, the New York department store; Cirque du Soleil, the South African entrepreneur Sol Kerzner's hotel chain; and Standard Chartered bank. The company has also bought into MGM Mirage, the Las Vegas gambling operation – even though gambling is banned in Dubai – and Troon Golf.

London properties include Adelphi on the Strand and the Grand Buildings in Trafalgar Square.

Rothschild was one of five banks working in recent months to help Dubai World meet its debt obligations. Deutsche Bank was the other lead adviser and they were supported by Citibank, JP Morgan and the Dubai Islamic Bank. When the standstill decision was taken on Wednesday, all the banks were stood down as the mandate had changed.

Rothschild and Deloittes declined to comment.

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