We noticed you're blocking ads.

Keep supporting great journalism by turning off your ad blocker.

Questions about why you are seeing this? Contact us

Font Size

- Aa +

Sun 12 Dec 2010 08:03 PM

Font Size

- Aa +

UPDATE: Dubai ruler names Sheikh Ahmed Dubai World chairman

Emirates chairman to oversee flagship conglomerate, new board also includes Supreme Fiscal Committee members

UPDATE: Dubai ruler names Sheikh Ahmed Dubai World chairman
UPDATE: Dubai ruler names Sheikh Ahmed Dubai World chairman
DUBAI WORLD BOSS: Sheikh Ahmed is also chairman of Emirates airline (ITP Images)
UPDATE: Dubai ruler names Sheikh Ahmed Dubai World chairman
DUBAI WORLD BOSS: Sheikh Ahmed is also chairman of Emirates airline (ITP Images)

Dubai named
Sheikh Ahmed bin Saeed Al Maktoum, head of Emirates airline, as
chairman of Dubai World a year after the company rocked global markets
with plans to freeze loan payments.

Sheikh Ahmed
replaces Sultan Ahmed bin Sulayem, who led Dubai World, one of the
emirate’s three main state-owned holding companies, when property unit
Nakheel  built palm-shaped islands off the emirate’s coast.

company built up $40bn in debt as he turned DP World into
the world’s fourth-biggest port operator and bought stakes in companies
including the US casino group MGM Mirage.

Dubai roiled
emerging market stocks last year after it announced that it would seek
a delay in repaying $24.9bn of loans as the global credit crunch
hurt Dubai’s property and trading businesses.

 The emirate and its
state-owned companies ran up debt of $112bn, according to
Barclays estimates, pushing it to restructure some of its groups.
Dubai World’s more than 70 creditor banks agreed in October to new debt
terms that include repayments of $4.4bn over five years and
another $10bn in eight years.

“The people
calling the shots right now are those that run successful businesses,
it makes investors more comfortable,” Yazan Abdeen, a Dubai-based fund
manager at ING Investment Management , said in a telephone
interview December 12. “I’m happy to see that there’s very high-level
decision-making going on to consolidate leadership that has a
successful track record,” said Abdeen who helps oversee $50m at
ING said.

The new board
includes Mohammed Ibrahim Al Shaibani, director-general of the Dubai
ruler’s court and chief executive officer of Investment Corp. of Dubai;
Ahmed Bin Humaid Al Tayer, governor of the Dubai International
Financial Centre; and Abdulrahman Al Saleh, director-general of the
department of finance. Sheikh Ahmed is also head of the Dubai Supreme
Fiscal Committee. Bin Sulayem remains chairman of DP World.

The management changes will help Dubai as it goes into another wave of debt-raising, Abdeen said.

economy, the second-biggest among seven in the United Arab Emirates,
will expand between 1.5 percent and 2 percent in 2011, mainly driven by
expansion in the services, trade and tourism industries, Shady Shaher,
a Standard Chartered economist said yesterday.

government hired CIMB Investment Bank, a Kuala Lumpur-based unit
of CIMB Group Holdings, the world’s top sukuk arranger this year,
as a lead manager to sell between $1bn and $1.5bn of
securities, a person with knowledge of the plan said November 24. Malaysian
Prime Minister Najib Razak said October 26 the Dubai Department of Finance
is proposing a multi-currency sukuk programme.

Dubai World’s
new board “will have jurisdictions that include studying the
feasibility of investments by the institution in commercial,
industrial, agricultural, real-estate, service and financial
projects,” according to an emailed statement from the Dubai
government’s media office yesterday.

Dubai World
isn’t the only state-owned group to restructure its debt. Dubai Holding
Commercial Operations Group, a real- estate and hospitality group
owned by Dubai Holding, received a one-month extension on a $555m revolving credit line until December 30.

International Capital an investment company owned by the emirate’s
ruler, sought a two-month extension on a $1.25bn loan maturing on
November 30, two people with knowledge of the discussions said.

is also in an advanced stage of altering terms on at least $10.5bn of loans and trade creditor bills.

“This is a page
turned for Dubai World,” Dubai-based Ahmad Alanani head of MENA fixed
income sales at Exotix said in a response to emailed questions
December 12. “But that’s not necessarily reflective of an overall
improvement in Dubai as a whole as the emirate is still grappling with
a massive debt hangover.”

The cost of
protecting the emirate’s debt against default rose 7 basis points so
far this quarter to 444 basis points on December 10, according to prices
provided by CMA DataVision. Abu Dhabi’s five-year credit default swaps
fell 20 basis points to 94.6 basis points on December 10. Dubai’s benchmark
share market index has fallen 0.3 percent in the fourth quarter.

The first
public figurehead to leave his post in May last year after the
crisis enveloped Dubai was Nasser Al Shaikh, the director of Dubai’s
Department of finance. In November that year, Dubai’s ruler Sheikh
Mohammed bin Rashid Al Maktoum removed Mohammed Al Gergawi, Sultan
Ahmed bin Sulayem and Mohammed Ali Alabbar from the board of the
emirate’s largest holding company, the Investment Corporation of Dubai.

The governor of the Dubai International Financial Centre,
the emirate’s banking hub, Omar Bin Sulaiman was also removed from his
post November 2009.


Arabian Business: why we're going behind a paywall

Real news, real analysis and real insight have real value – especially at a time like this. Unlimited access ArabianBusiness.com can be unlocked for as little as $4.75 per month. Click here for more details.
Jebel Ali Baba 9 years ago

After two years finally a good decision and the right move to bring the damaged Dubai World and especially Nakheel back on course. Well done.

Simon V 9 years ago

It's clear that the men who have been removed clearly were not the right people for the job... it will be interesting to watch the new guard bring about the drastically required change.

There is a lesson for CEO's, Chairman and Executives everywhere here - never lose sight of your shareholders... you are not bigger than the people you represent.

Peter Cooper 9 years ago

Yes very significant but what will happen to Nakheel now? This is probably the biggest question for the new board.

Mohamed 9 years ago

Those who left the Board and lead the group earlier deserves appreciation by all means for registering a small place like Dubai in a prominent position among global metropolitan cities, though the crisis and its consequences projected the same place more risky and adverse for investments. The agenda and perspectives of the earlier board and the new board is entirely different. Wish HH Sh. Ahmed and his team all the best to resurrect the group and in a way Dubai from the difficult situation it faces. Congratulations deserves for all and HH Sh. Mohamed for his continued confidence in HH Sh. Ahmed. Patience is the key and we have to patiently wait to see Dubai back in lime light. God Bless.

Khalifa 9 years ago

I am an ex-employee of Dubai World. Knowing how Sheikh Ahmed managed Emirates Airlines, I strongly believe that changes will come fast. However, results will take time to mature and reflect on the bottom line of Dubai World.

DP World has a great management team with the leadership of Mohammed Sharaf, Nakheel needs a lot of work, so does Istithmar . Great step forward and wishing Sheikh Ahmed and his new team the best of luck.

Roger 9 years ago

I am at a loss. The article says $4.4Bn over 5 years and $10Bn after 8 years. This adds up to $14.4 NOT $24.9. What happened to the remaining $10Bn. Not a good deal.

Simon V 9 years ago

I'm not impressed with the Executive management that put Dubai on the map in the early days..
Realistically, development on that scale was going to happen whether they were involved or not... such is the nature of a project with a seemingly "unlimited budget".
The demise of the Dubai property bubble demonstrated a catastrophic failure from the very top down of the Executive management teams at Nakheel, Limitless, Sama Dubai, Dubai Properties etc. to effectively manage large projects.
I worked as an advisor to the Chairman of one of these master developers for several years, he criminally ignored all our 'warnings' whilst on his own personal mission, this cost Dubai hundreds of millions in wasteful spending.
I genuinely look forward to watching the new guard respond to market conditions through controlled and realistic budgetry spending.

Abdulaziz 9 years ago

I thought Dubai was a Muslim emirate, why does it own shares in US casino group MGM Mirage ? This is against the Islamic laws and believes.

zooey charles 9 years ago

welcome to sheikh ahmed - judging from his track record we hope he will turn the company around insha'allah. and we sincerely hope and trust he will steer clear of haram investments in "companies including the US casino group MGM Mirage. Casinos! what a shock!

Sandpiper 9 years ago

Lets see how successful Shk Ahmed is in getting government subsidies for DW companies as he was for Emirates Airline, if he is we might see similar results.