Dubai World may be forced to sell off domestic and overseas assets such as P&O and the QE2 as it attempts to restructure its $60bn debt burden.
The beleaguered company has strongly denied it may have to sell off some of its prized assets but comments from Dubai’s finance chief indicate that it may have no choice.
The news comes at the same time as the group’s six biggest lending banks began talks with the group in a bid to thrash out a deal before a creditor’s meeting on December 21.
Finance chief Abdul Rahman al-Saleh moved to further distance the government from Dubai World’s problems yesterday.
Speaking to Al-Jazeera yesterday [December 7] he said: “Like any company that has commitments, part of getting liquidity is selling some assets.
“Part of obtaining finance is selling assets…belonging to the company and not the government.”
He also stated that there was “confusion” in the media that the government might be forced to sell some assets, referring to reports that Emirates Airline could be up for grabs.
“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 yesterday.
Four UK banks – HSBC, RBS, Lloyds and Standard Chartered – met with local banks and Dubai World’s advisers Deloitte and NM Rothschild in the emirate yesterday.
The banks are trying to ascertain whether Dubai World can make interest payments due on December 14 on the bonds of parent company Nakheel.
Dubai World sparked an international panic when it asked creditors to restructure $59bn of its liabilities and suspend interest payments for six months.
Meanwhile,hotel rates in the emirate have bottomed out in a bid to boost flagging occupancy levels.