Dubai selling assets to pay debts

Dubai World

Call it strategic repositioning or anything else, but the fact of matter is that Dubai is selling offshore assets to pay back $20bn in debt and interest, due next year

DP World, the port operator, is selling 75 percent of its Australian unit, raising $1.5bn. Borse Dubai Ltd, which controls Dubai’s two stock exchanges, raised $672m December 16 by selling about half its stake in Nasdaq OMX Group, owner of the second-largest US equity exchange. Both companies said they will use the proceeds to pay down debt.

As Arabian Business reports, Dubai and its state-controlled companies are still negotiating with the creditors and if things get worse they may have to sell overseas assets such as luxury retailer Barneys New York, US hotel and casino group MGM Mirage and Canadian entertainment company Cirque du Soleil, all amassed during the boom years.

Sheikh Ahmed Bin Saeed Al Maktoum, chairman of the Dubai Supreme Fiscal Committee and the new chairman of Dubai World, stated on ovember 28 that Dubai may sell stakes in some of its “leading” companies to help reduce debt.

Among Dubai’s most prized domestic assets are Emirates Airline, hotel operator Jumeirah Group, Dubai Maritime City and Jebel Ali Free Zone.

Barclays Capital estimated in September that Dubai and its government-owned entities have about $112bn in debt – representing more than 140 percent of the country’s gross domestic product – that was amassed during years of growth in the property and tourism industries.

So, if Dubai is for sale, who’s gonna buy it? The Indians or Chinese?