Dubai

[winston]

The "Dubai" brand is lost forever ...

No Love Lost Between Dubai World, Bankers on Deal Talk

By: Reuters

If Dubai was floating a trial balloon with a rumored debt offer proposing a scant 60 cents on the dollar, it may have to think again.

By Sharon Lorimer
--------------------------------------------------------------------------------

Stock markets tumbled and bankers turned glum following a report that Dubai World was mulling offering creditors two options, neither one reassuring to investors already spooked by Dubai's debt debacle.

According to the report, Dubai World will offer creditors either 60 percent repayment over seven years and a government guarantee, or full repayment with a debt for equity swap for property assets of Nakheel and no guarantee.

Neither option is palatable to bankers and the government was quick to distance itself from the report by Dow Jones.

"If anything is a surprise, it's in the figures," said a banker at a large international bank. "I thought they would have proposed a little better than 60 percent. This doesn't look promising."

Aside from the steep 40 percent haircut, creditors are unlikely to welcome getting assets in Nakheel, the developer behind man-made islands shaped like palms and a map of the world.

Nakheel had net tangible assets of 73.7 billion UAE dirhams ($20.07 billion) as of June 30, with properties under construction, including land, valued at 112.8 billion dirhams, according to Mac Capital Advisors.

"This gives an indication of what they're thinking — they're considering some sort of discount," said one Gulf-based banker who asked not to be identified. "It implies the government could have senior position, which the banks may not want to accept. And if it (the deal) doesn't guarantee interest payments, it's not a great deal for the banks."

The government reiterated last week that financial aid to Dubai World, through the Dubai Financial Support Fund (DFSF), was being delivered on commercial terms.

Dubai World rocked global markets in November with plans to request a delay on repaying $26 billion in debt linked to its main property units Nakheel and Limitless World. It staved off default on a $4.1 billion Islamic bond linked to Nakheel, after a last minute bailout from Abu Dhabi.

Criticized for its lack of transparency, Dubai said on Sunday it had made no formal restructuring proposals and nothing was expected until March or April.

"Although today's restructuring rumors have been denied by Dubai authorities, the risk of a deep haircut and extension of maturities still remains high — given the combined solvency and liquidity problems facing Dubai World and a number of its subsidiaries, including Nakheel," said Goldman Sachs in a note to clients.

Dubai's main index fell to its lowest level in three weeks on Sunday in response to the news report, closing 3.5 percent lower.

"The stock market's reaction (today) reflects how bankers have interpreted this," said a senior Abu Dhabi based banker, adding that no official announcement has been made to the bank's representatives at creditor meetings with Dubai World.

The company is negotiating with an informal bank coordinating committee and has yet to make a formal proposal on how it plans to repay some $22 billion in debt.

The conglomerate is relying on the goodwill — and self-interest — of creditors to patiently wait for such details on how it plans to meet its obligations.

"It's a double-edged sword — how much can Dubai World push down on UAE banks that hold this debt?" said Ali Khan, managing director and head of brokerage at Arqaam Capital. "This will have wider implications, given the bank sector's weight on the stock market."

On Friday, the cost of insuring Dubai's debt soared to 2-1/2 month highs and bond yields rose as growing uncertainty over the fate of the debt-laden conglomerate World sent investors scrambling to hedge their exposure.

"I think it's for real, just gently priming the market," said an Asia-based banker at a major international bank. "Tomorrow will be very interesting, when London and the U.S. are in."

http://www.cnbc.com/id/35402813

[winston]

Only US$26b can cause so much loss in reputation ...

UAE government backs Dubai; Abu Dhabi help may lag by Rania Oteify and Rachna Uppal

DUBAI (Reuters) - The United Arab Emirates pledged its support for Dubai on Tuesday but said the emirate had yet to ask for federal help, which analysts said would come reluctantly and with strings attached.

The UAE finance minister said the federal government would support the emirate as it negotiates a plan to restructure $26 billion in debt and said he expected a deal to be finalized soon.

http://www.reuters.com/article/idUSTRE6 ... orethebell

[kennynah]

fyi, some one in the commodities business just told me over lunch that a Abu Dhabi prince, supposedly in-charge of the country's SWF and investments, died from an airplane disaster this morning. i have no means of verifying...

the repercussion maybe a power struggle for that position ... no idea what other impact it may have on the rest of the financial world... i doubt it though...

[millionairemind]

fyi, some one in the commodities business just told me over lunch that a Abu Dhabi prince, supposedly in-charge of the country's SWF and investments, died from an airplane disaster this morning. i have no means of verifying...

the repercussion maybe a power struggle for that position ... no idea what other impact it may have on the rest of the financial world... i doubt it though...

K - He is feared dead...

http://www.telegraph.co.uk/finance/news ... crash.html

[kennynah]

ah...MM.... thanks ....

indeed, my friend was saying it was so odd that the pilot wasnt harmed but that the passenger could go missing??? he said smells like an "inside job"

[millionairemind]

ah...MM.... thanks ....

indeed, my friend was saying it was so odd that the pilot wasnt harmed but that the passenger could go missing??? he said smells like an "inside job"

Makes for a good Bourne movie

[iam802]

Still have not settled on this Dubai World issue.

----------------------

Creditor claims could delay Dubai debt deal: experts

http://www.reuters.com/article/idUSTRE6373DX20100408

(Reuters) - Dubai's special tribunal, set up to hear cases against indebted state firm Dubai World, could throw efforts to restructure $26 billion in debt into disarray if just one creditor files a claim, legal experts say.

Dubai World DBWLD.UL is lobbying banks to sign up for the proposal, but even if the required supermajority of 66.66 percent of creditors endorses the plan, a claim at the tribunal could halt the restructuring plans and keep lenders locked in.

"If a creditor was to go to the tribunal, a standstill would be put in place," said Philip Abbott, partner at Simmons & Simmons.

Abbott's comments come one day after the tribunal unveiled its first claim, which will be closely watched by creditors to see how the panel proceeds. The case was filed against Dubai World subsidiary Limitless LLC by a former employee on April 5.

But because the case was filed against Limitless, which was excluded from the Dubai World restructuring, and because it was filed by a former employee and not a lender, it is more of a warning shot than an actual threat to the majority of lenders.

Dubai World rattled global markets in late November when it said it would delay repayment of $26 billion in debt linked to Dubai World and its property units Limitless and Nakheel.

Dubai set up a special tribunal in December made up of three international judges to oversee the restructuring of Dubai World debt and settle any disputes that could arise.

Dubai World needs approval from the supermajority of creditors such as banks, unsecured banks, sukuk holders and trade creditors in order to proceed with the restructuring.

Abbott said that overall market perception of the deal has been positive, with big name creditors such as HSBC (HSBA.L) voicing their support of the debt offer.

But an approval will not make much of a difference if creditors decide to take grievances to the special tribunal at the Dubai International Financial Center.

The tribunal would force Dubai World to halt any restructuring plans until the matter is resolved in court, forcing banks to prolong the resolution.

Nor can the tribunal be expected to favor lenders over borrowers, said one attorney at a major law firm, who requested anonymity due to the sensitivity of the matter.

"The tribunal is not necessarily a creditor-friendly process either," he said. "It will seek to be fair to the bulk of creditors so if there are one or two outliers, the tribunal is going to take that into consideration."

(Reporting by Shaheen Pasha; Editing by Thomas Atkins and Michael Shields)

[millionairemind]

May 28, 2010, 6.45 pm (Singapore time)

Dubai's DIC sells off listed investments: source

DUBAI - Dubai International Capital (DIC), an investment unit of conglomerate Dubai Holding, has sold off its last listed, liquid assets, a source familiar with the matter said, with creditors ready to queue up and see the upshot.

DIC sold investments in EADS, Sony and ICICI - for which it paid as much as US$1.5 billion in total - in 2009, the source said, confirming an article that appeared on Friday in Emirati newspaper The National.

Creditors now in talks to reschedule DIC debt will be eager to know the value of assets, if any, remaining on the company's books, and how liquid they are.

'Stakes in EADS, the maker of Airbus, the Japanese electronics giant Sony and the Indian bank ICICI were all sold after the financial crisis broke in 2008,' the article said.

DIC on Thursday sought a three-month delay on debt repayment in a move that underscored the depth of the debt problems plaguing the myriad of state-linked firms known as Dubai Inc.

The DIC investment unit has a US$1.25 billion loan maturing in June, according to Reuters data, and DIC has US$2.6 billion in debt overall, a source familiar with the matter said.

The new delay comes in the wake of the emirate's shock request last November to delay repayments on US$26 billion of debt linked to Dubai World, and its property units.

Speculation intensified in April that DIC's parent, Dubai Holding, had also been badly hit by the financial crisis that severely damaged Dubai's property market, when one of its units, DHCOG, delayed its 2009 results. -- REUTERS

[winston]

Properties not sure thing ?

Dubai Property Prices May Continue to Fall for Two More Years By Zainab Fattah

Dubai property prices may drop for the next two years, extending a decline in the Persian Gulf sheikhdom that’s already cut values by more than 60 percent since the 2008 peak.

Residential values may fall as much as 20 percent more by the end of 2012 if new homes are built as planned, according to broker Landmark Advisory in Dubai. Cluttons LLP, a London-based property consultant, and Jones Lang LaSalle Inc., the second- largest publicly traded commercial property broker, also forecast further declines.

About 48,000 homes will come on to the market in the next two years, or about 12 percent of existing supply, according to Jesse Downs, director of research at Landmark.

An influx of foreign buyers sparked a construction boom as prices rose by 79 percent to mid-2008 from 2007 before the financial crisis caused lenders to tighten credit and speculators left the market.

Home prices fell 6 percent in the quarter from the previous three months, Colliers International said on Nov. 7.


http://www.bloomberg.com/news/2010-12-1 ... grows.html

[winston]

Dubai stocks offer value as index in bull market, says Mark Mobius
Source: BI-ME with Bloomberg

Templeton Asset Management Ltd.’s Mark Mobius said Dubai banking, property and services shares offer buying opportunities as the emirate’s benchmark index enters a bull market, after rebounding more than 20% from a six-year low.

http://www.bi-me.com/main.php?c=3&cg=4&t=1&id=52203