02 October 2014 – DUBAI, UAE – World’s visionary city with most of the population are migrated workers and oil and service are the main Industry, Dubai is recovering from its financial downturn towards the sound economy again. As Dubai has billions of dollar in debt, a deal has been established to re-pay their debt to the lenders in comfort of extended time frame.
According to the news sources, Shaikh Ahmed rules out any flotations of Dubai’s state-owned companies, including Emirates airline and air travel service provider dnata.
Dubai World’s biggest creditors have agreed on a deal to renegotiate its debt repayment schedule, Sheikh Ahmed bin Saeed Al Maktoum confirmed to reporters on the sidelines of the second Africa Global Business Forum 2014 in Dubai on Wednesday.
Responding to a question if the biggest creditors have agreed on the plan, the chairman of Dubai’s Supreme Fiscal Committee replied: “I would say so.”
Sheikh Ahmed, who is also Chairman of Dubai Civil Aviation and Chief Executive of Emirates airline and Group, ruled out any flotations of Dubai’s state-owned companies, including Emirates airline and air travel service provider dnata. They are not being considered, he added.
Last month, Reuters revealed that agreement had been secured with the creditor committee of banks, including HSBC and Emirates NBD. Under the new deal, the repayment date of the biggest chunk of debt under Dubai World’s $25 billion restructuring would be extended, in exchange for a series of incentives, including shares in global ports firm DP World as collateral.
It was reported that Dubai World is also offering to return cash throughout the loan’s lifespan, more assets as collateral, a higher interest rate and an early repayment of a first tranche of debt due next year. In addition, the Dubai government will make extra funds available to Dubai World.
In return, the company wants creditors to grant it more time to meet a second, larger repayment currently due in 2018. So in total, around $15 billion of the original renegotiated amount is outstanding after small repayments and the shift of property developer Nakheel to direct government ownership.
Dubai World, under the revised plan, will repay the $4.4 billion tranche due in May 2015 early — likely in December or January depending on the progress of negotiations — in exchange for the $10.3 billion 2018 payment being extended until 2022. The new 2022 payment will also be augmented in a number of ways aimed at persuading creditors to grant more time, according to reports.
At the Africa forum, Sheikh Ahmed also expressed that Dubai’s leadership is concerned that rising property prices could make the emirate too expensive and it will consider steps to limit increases.
“I hope it holds at this level as I don’t want to see high inflation, to keep Dubai as an attractive place to do business,” Sheikh Ahmed said. “The real estate market is getting expensive in certain areas. We are focused on what we can do to not see it get too expensive,” he added.
Dubai house prices, which dropped around 60 per cent from a peak of 2008 during the global financial crises, recovered nearly 35 per cent last year and more in some areas.
A country began in 1971 as the united Arab emirates from a vast dessert land to today’s vibrant cities, cheering lifestyle and one of the secure place on earth to live was not easy to establish. World’s economic crisis does reflect in this country as its business ties are all depends on European and American markets.
Source: KT ONline