Mohammed Al Mannaei, director, Mina Rashid DP World, Dubai, speaks to Breaking Travel News at World Travel Awards 2012 Grand Final Gala Ceremony in Delhi, India.
Concerns over Dubai’s financial position have resurfaced after its largest private equity company, Dubai International Capital, requested a three-month extension to its debt repayments, in the latest blow to the emirate’s financial image.
Dubai World, the state-owned conglomerate whose debt problems sparked last year’s financial crisis in the emirate, has said it has reached an agreement “in principal” to repay its creditors. It has proposed repaying 30 percent of its $23.5 billion debt within five years and the remainder three years later.
Following months of uncertainty, the Dubai government has confirmed it will offer a financial lifeline to its troubled investment vehicle Dubai World. The company shocked markets late last year when requesting more time to meet debt obligations, but will now have an opportunity to negotiate with creditors.
Dubai World is to ask its creditors for up to eight more years to pay back a $22 billion debt. The troubled investment fund, which owns the QE2 cruise liner and Cirque du Soleil, will promise creditors that it will be able to repay the entire debt if granted the extension.
Creditors to Dubai World could be offered 60 per cent of the money they are owed, under the latest proposal to restructure the company’s $22 billion of outstanding debts. The deal would ensure repayment after seven years following a 40 per cent “hair cut”, with the agreement backed by the Dubai government.
Dubai World is putting the iconic cruise liner QE2 up for sale, as well as host of other interests including Cirque du Soleil, as it grapples to cut its $22bn debt mountain.
Shares in the Gulf have soared after news that Dubai has received a $10 billion bail-out from its neighbour Abu Dhabi to tide it over till April 2010. The funds will also be used to repay a Dubai World Islamic debt which matures today and provide a fighting fund while it negotiates a restructuring deal with creditors.
Hotels in Dubai are slashing rates in a bid to boost occupancy levels following news of the Dubai World debt default. Some five-star hotels are offering rooms for well below £100 a night, and four-star for less than £30 per night. Meanwhile Dubai stocks have levelled off after last week’s dramatic volatility.
Las Vegas’ first luxury non-gambling, non-smoking hotel opened yesterday (December 1) in the US’ biggest private development, CityCenter. The 57-storey Vdara Hotel & Spa (pictured) will have 1,500 rooms and forms one of the key parts of the $8.5bn project.
The Government of Dubai has said it will not bail-out its subsidiary Dubai World, sparking fears that creditors to the hugely-indebted conglomerate could lose billions.