Dubai officials in confidence-building UK, US trip
Dubai, December 17, 2009
Two top Dubai officials are visiting Britain and the United States over the coming days to rebuild investor confidence after neighboring Abu Dhabi helped bail out the emirate's flagship company.
A source close to the government said the officials were already in London and would be in New York on Thursday and Washington on Friday to meet financial and political leaders. 'This is the next step in Dubai's commitment to greater transparency,' said the source.
The roadshow is being led by Sheikh Ahmed bin Saeed al-Maktoum, chairman of Dubai's Supreme Fiscal Committee and the uncle of Dubai's ruler, Sheikh Mohammed bin Rashid al-Maktoum, the source said.
Until recently he was best known as leader of the Emirates airline, but his public profile has risen since the debt crisis erupted.
'They will spend the next few days meeting financial, economic and political leaders in London, New York and Washington, DC to discuss the actions taken this week to stabilize global markets.'
The emirate, famous for its man-made islands in the shape of palms and for other infrastructure projects, rocked global markets on November 25 with a request for a standstill agreement on $26 billion of debt linked to Dubai World and its two main property units, Nakheel and Limitless World.
Also on the trip is Mohammed al-Shaibani, deputy chairman of the same committee. He heads Sheikh Mohammed's court and is chief executive of the Investment Corporation Dubai, which oversees the government's investment portfolio.
Earlier this week, Abu Dhabi, which produces 90 per cent of the UAE's oil exports, provided $10 billion of financial aid to its fellow UAE member to meet the debt obligations of Dubai World until the end of April and to stave off a bond default by Nakheel.
Some $4.1 billion of the rescue funding helped Nakheel repay an Islamic bond, or sukuk, on Tuesday, a day after its due date.
The Abu Dhabi lifeline came in the form of bonds, at similar terms to a $10 billion bond issue to the UAE central bank in February, which carried a coupon of 4 percent per annum for the five-year, fixed-term issue.
Dubai also announced this week it would implement immediately an insolvency law modeled on U.S. and British practices in the event Dubai World needs to seek protection from its creditors. Meanwhile, Dubai's ruler ordered the creation of a tribunal, headed by three international judges, to oversee any disputes between Dubai World and its creditors.
'They want to explain what happened this week,' said another source close to the government. 'It's very much the transparency message and to discuss the fact they presented a comprehensive solution.'
With the bond repayment out of the way, Dubai World must now agree a standstill with creditors, allowing it time to undergo a massive restructuring. It is slated to meet representatives from some 90 banks in Dubai on Monday.-Reuters