Dubai will remain an attractive regional business hub, despite the government having to asked for a standstill agreement regarding the debts of its flagship companies Dubai World and Nakheel,a senior figure has said in a statement.
The government's intervention in the debt restructuring at Dubai World, was aimed to ensure the holding company’s "long term commercial success", said Sheikh Ahmed Bin Saeed Al Maktoum, chairman of Dubai Government's Supreme Fiscal Committee in comments published by news agency WAM.
“We want to ensure resources are deployed in the full knowledge that they are used to enhance the businesses of the Dubai World Group, build on the restructuring that has already been taking place and ensure long term commercial success," said Sheikh Ahmed, who is also chairman of Dubai Civil Aviation Corporation, chairman and chief executive of Emirates Airline and Group.
"Our intervention in Dubai World was carefully planned and reflects its specific financial position. The government is spearheading the restructuring of this commercial operation in the full knowledge of how the markets would react. We understand the concerns of the market and the creditors in particular. However we have had to intervene because of the need to take decisive action to address its particular debt burden," he added.
"Like most global cities, Dubai has experienced its share of economic and social challenges in this global downturn. No market is immune from economic issues. This is a sensible business decision."
He said further information would be made available early next week.
Sheikh Ahmed said that the unprecedented growth, in Dubai and across the UAE, over the past decade "has helped lay the foundation for what is now a broad-based sustainable economy beyond just natural resources".
"The economic fundamentals, such as our highly developed infrastructure, strong transport and communications hub and regional financial centre will ensure Dubai remains an attractive regional market," he added.
Dubai World is one of the UAE's leading holding companies that includes port operator DP World and property developer Nakheel.
Dubai said on Wednesday that it would ask creditors of Dubai World and Nakheel to agree to delayed debt repayments as a step towards restructuring. It added that DP World was not part of the restructuring process. Dubai World has $59bn of liabilities, representing a large part of Dubai's total debt of $80bn.