By Tamara Walid
Internal report shows value of company's assets dropped 35% last year.
State-linked Dubai World's property and investment assets exceeded $120bn at the end of 2009 and could cover its debt of $57bn, an Arabic-language daily said on Sunday.
Citing a recent internal report shared with creditors, Al Ittihad newspaper said the value of the company's property assets dropped around 35 percent in 2009, compared with $157bn in 2008.
"The drop in the value of investment and strategic assets for the group did not exceed 20 percent," the paper said.
Dubai World is one of Dubai's largest conglomerates. The group came under fire last November when it said it would restructure $26bn in debt.
Dubai is one of seven emirates comprising the United Arab Emirates. (Reuters)
I would like to see the list of properties and their values. A plot of desert land that may have had potential for a hotel or high rise tower 3 years ago is probably going to remain a plot of desert for the next few years. I am not sure how you place a value on properties like this in today's economic climate. To assume Dubai World's assets could cover its liabilities is to also assume there would be buyers for Dubai World's assets. That is a big assumption these days when liquidity has dried up. We would have to see a complete list of these assets to know for sure if there is anything worth buying available but DW would still have to find a buyer willing to pay a decent price...not likely these days.
Properties have always the value only of what a buyer is willing to pay. And if there are no buyers, so whats the value of the properties then?
I am curious to know the rationale for these valuations. I wonder how the W Hotel , New York fits into this as it was sold at a foreclosure auction for around USD$2m and was acquired for USD$240m plus USD$50m.So it has lost over 90% of the value whereas the property in London recently sold to GPE by DW only lost 35% . I wonder if IBN Batatuta or Dragon Mart was in that valuation as well ?
Makes one wonder how the assets are valued to an amount fixed by a few people, but if DW was to offload them, I doubt anyone with a sound mind would pay walnuts, if peanuts is the rate! Dream on... But I seriously think DW can get out of this mess, in due course. Every major conglomerate goes thru the ups & downs, so why no DW..!! Good Luck.
Well, when i moved from Dubai for good i had to dispose a whole lot of furnitures, approximately valued at 5k dhms. But ultimately i had to pile themup near the garbage bins as there were no takers for the furnitures. So, what is the worth of the furnitures? can somebody enlighten me?