DUBAI – Dubai’s efforts to stabilise its economy took several turns yesterday, The National reports, with the emirate receiving new support from banks in neighbouring Abu Dhabi and then moving to take direct control of Dubai World and seek a delay in payments of the company’s debts.
Dubai World is one of the emirate’s three flagship holding firms, and is home to some of the best-known government-linked entities within the emirate.
Among them is the property firm Nakheel, the developer responsible for the huge Palm Jumeirah and The World developments built on reclaimed land off the coast.
The Dubai government said it would ask creditors of Dubai World for a standstill on debt worth billions of dollars as a first step toward its restructuring.
According to reports, Dubai World’s US$60 billion of liabilities represents nearly three quarters of the emirate’s total state debt.
Dubai World owns P&O ports, as well as investments with Las Vegas’s MGM Mirage casino group and a US$1 billion stake in Barneys, the New York department store.
The Times Online reported, “Dubai’s once-booming economy has deflated and its property sector, with its ludicrous architecture and record-breaking buildings, has collapsed.
“An estimated 400 projects worth more than US$300 billion have been cancelled, shut down or are on a go-slow as developers try to cope with property prices that are down as much as 60 per cent.”
