Dubai Government To Support Business Plan Of Dubai World And

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Re: Dubai government to support business plan of Dubai World and Mar 28, 2010
Will not be surprised if the "internal resources" here refer to the Abu Dhabi government. Its the only way out and S. Khalifa will as I have said before make Dubai squirm a bit more before dishing out the dosh.

We shall see eh ....

BabyDoll
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Re: Dubai government to support business plan of Dubai World and Mar 29, 2010
If the patient is kept alive, and I stress, IF, then it will only be to harvest the organs at an opportune moment !
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Big funds sit out UAE rally, wary on Dubai rescue Mar 30, 2010
* Institutional money still on the sidelines-analysts
* Say big players need more clarity on debt plan
* Longer term worries about liquidity, market depth

By Matt Smith and Dinesh Nair

DUBAI, March 29 (Reuters) - Institutional investors are sitting out the recovery on UAE stock markets, wary about Dubai's debt rescue proposal and hesitant about prospects longer term, analysts say.

Broader issues like liquidity and market breadth may prevent foreign institutions from coming back to UAE exchanges, which are dominated by property and banking stocks that are closely linked and which lack defensive counters.

In addition, UAE is not included on the MSCI Emerging Markets Index .MSCIEF against which large institutional funds benchmark their performance, meaning many fund managers cannot buy UAE stocks regardless of how attractive valuations are.

The MSCI Emerging Markets Index gained more than 78 percent in 2009 while the Dubai and Abu Dhabi indexes rose 10.2 percent and 15 percent respectively during the same period.

"There is a lot of institutional cash sitting on the sidelines, waiting for a pull-back. This hasn't happened yet, so we will have to see if they decide to chase the market," said Matthew Wakeman, EFG-Hermes managing director for cash and equity-linked trading.

Stock markets in the UAE have rallied on retail interest since Dubai said it will spend up to $9.5 billion restructuring its debt-laden Dubai World [DBWLD.UL] conglomerate.

The plan will give bank lenders their money back in five to eight years and repay two key bonds. [ID:nLDE62O010]

Investors cheered the move, with Dubai's index .DFMGI rising 6.3 percent to a 14-week high in the two trading days following last week's announcement, while Abu Dhabi's benchmark .ADI gained 2 percent over the same period.

But analysts say more institutional involvement is needed for the rally to be sustainable, with current trading largely the preserve of short-term retail traders.

Institutional buyers want more details on Dubai's debt plan such as how the cash-strapped emirate will raise the $3.8 billion.

Also, the government said bank creditors would receive 100 percent principle repayment via a new debt with five and eight-year maturities. There was no detail on the interest rate.

LOOMING DANGER

"The immediate problem is solved but the danger still looms. This has largely been a retail-driven rally," said Vyas Jayabhanu, head of investment at Al Dhafra Financial Broker.

"Whatever the volume, a magnitude of funds have been pulled out by institutions and still have not come back to the market," he said.

"It's very hard to build a regional portfolio here when trading is concentrated mainly in banking and real estate stocks," said Robert McKinnon, ASAS Capital chief investment officer.

"The other issue is liquidity, volumes are still very low to attract institutions.

"Foreign institutions have been burnt in the past. The next time they come in, they are going to be a lot more cautious."

Dubai World shocked global markets in November when it announced a standstill for about $26 billion of debt related to its property units Nakheel and Limitless. A last minute lifeline from Abu Dhabi helped avert default on a $4.1 billion bond issued by Nakheel.

http://www.reuters.com/article/idUSLDE62S0F020100329
RobbyG
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Re: Dubai government to support business plan of Dubai World and Mar 30, 2010
And this is from JP Morgan:

Even as the entire Dubai Inc bond / sukuk universe rallies on this morning's seemingly positive announcement on Dubai World (DW) and Nakheel's restructuring proposal (Proposal), we would be cautious on indiscriminately extending the potential positive outcome for Nakheel bonds to other Dubai Inc entities.

· * We maintain our Overweight recommendation on Dubai Holding Commercial (DHCOG), and are initiating coverage on Jebel Ali Free Zone (JAFZA) and DIFC Investments (DIFCI) with Underweight recommendations on the back of the post Proposal rally. We recommend that investors sell these bonds into strength. We are also initiating coverage on DP World with an Underweight on a relative value basis.

· * Although positive in terms if providing clarity, there is limited new positive information in the Proposal to make us significantly re-rate Dubai Inc entities' credit risk to lower levels. For starters, the government has not explicitly ruled out restructuring other Dubai Inc entities, and continues to distinguish between sovereign and non-sovereign obligations. In addition, there is no mention of additional Abu Dhabi government support. Also, there is lack of clarity on source of funding on repayment of DW bank creditors in the absence of a government guarantee. Lastly, repayment / refinancing risk for overall Dubai Inc risk remains unmitigated and front-end loaded (debt maturities of $20 billion in 2011 as per IMF estimates – this excludes DW debt being restructured).

· * The Proposal is clearly positive for Nakheel sukuks, somewhat positive for trade creditors – but seemingly negative for bank lenders (in particular lenders at DW level). There is no mention of a government repayment guarantee for DW bank creditors, and the government intends to inject only $1.5 billion cash into DW to support its creditors and working capital commitments. In essence, DW creditors will be relying upon assets sales and dividends for eventual principal repayment.
BabyDoll
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Re: Dubai government to support business plan of Dubai World and Mar 30, 2010
The title of this thread is "Dubai Government to support business plan ......"

Not so much a "Night of the Long Knives" as "Death by a Thousand Cuts" hardly a vote of confidence but then I suppose if you live by the sword then you should not be surprised at the eventual outcome ...

http://www.arabianbusiness.com/584888-n ... tructuring

Bin Sulayem replaced as Nakheel chairman

by Reuters on Tuesday, 30 March 2010

Dubai swept out the board of indebted property firm Nakheel and replaced its high profile chairman on Tuesday, in the wake of parent company Dubai World's $9.5 billion rescue plan.

Nakheel, builder of man-made islands in the shape of palms and a map of the world, will get a new board and chairman as the developer pushes ahead with projects.

Ali Rashid Ahmed Lootah was appointed chairman, replacing Sultan Ahmed bin Sulayem who is also chairman of Dubai World and a major name in Dubai's corporate landscape.

Lootah is listed as a vice-chairman of Dubai's Mashreq Bank on the lender's website.

The changes come less than a week after Dubai launched plans to restructure $26 billion in Dubai World debt.

"They have done the financial restructuring and now it's time for the administrative restructuring, so it's a natural progression," said Mohammed Yasin, chief executive at Shuaa Securities. "Without changes to management, the restructuring would have been half done.

"The challenges are still big for Nakheel but putting new money after bad money does not ensure success. It's the management that ensures success."

Nakheel claims to be the largest property firm in the Middle East and was the unit within Dubai's dense constellation of government-related entities that threatened to scupper over six years of rapid expansion that thrust Dubai on the world stage.

The Dubai government said in a statement the new board would help prioritise property projects, many of which have been put on hold since Dubai's boom turned to bust. (Reuters)
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Dubai’s Debt Proposal Wins Support From Creditor HSBC Mar 30, 2010
Slowly but surely, the confidence in repayment is coming back among the institutions.

March 30 (Bloomberg) -- Dubai World’s plan to restructure $24.8 billion of its borrowings won support from HSBC Holdings Plc, one of its biggest creditors.

“We are comfortable with the proposal,” Stuart Gulliver, HSBC’s head of investment banking, told reporters at a press conference in Abu Dhabi today “We’re very, very close to having a completely satisfactory structure here,” he said. Asked if the bank would sign up to the proposal, he said “if they put the document in front of us, yes, we would.”

Dubai World, one of the emirate’s three main state-owned holding companies, and its property unit Nakheel PJSC, are seeking to renegotiate their borrowings after the global credit crisis battered Dubai’s property market left the emirate’s companies unable to raise financing.

Dubai World asked creditors on March 25 to roll over outstanding debt into two new loans of five-year and eight-year maturities. Lenders will be paid their principal in full, although the interest rate on the loans is still being negotiated with the creditor banks, Dubai World Chief Restructuring Officer Aidan Birkett said that day.

Dubai World’s creditors have been made aware of the interest rate on the new loans, and have been given a choice of maturities, Gulliver said.

Loan Maturities

Separately, Nakheel’s creditors were asked to extend loan maturities at interest rates linked to the Emirates interbank offered rate and the London interbank offered rate. Two of Nakheel’s Islamic bonds, which raised $1.73 billion, will be paid in full when they mature this year and in 2011.

Dubai World’s creditors will be paid interest below the market rate in cash. That will be supplemented by a so-called payment-in-kind, according to a person close to the Dubai government who declined to be identified because the talks are private. The person didn’t specify the size of the payment-in kind, which creditors would receive at maturity rather than over the lifetime of the loan.

Dubai World has also offered creditors a shortfall guarantee, where the government will make up the shortfall up to a certain level if the sale of Dubai World’s assets does not generate enough cash to repay loans, said the person.


http://www.bloomberg.com/apps/news?pid= ... La3b65sIXM
RobbyG
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Re: Dubai government to support business plan of Dubai World and Mar 31, 2010
HSBC are DW's clearing bank and one of the principle creditors. They are unique as they stand to benefit both in terms of the repayment and in short term cash flows, so to hear that they are in favour comes as no real surprise to any of the creditors, only to Joe Public.

Spin dude, its all spin.
viking-warrior
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Re: Dubai government to support business plan of Dubai World May 26, 2010
9.5 billion dollars looks like a lot of money......and it is ! But when one reflects that the UK Govt have announced £6 BILLION STERLING of CUTS [ roughly equal to the Dubai debt] and that the UK total deficit is over 700 BILLION POUNDS STERLING, it brings things into perspective. I know we have 60 million people in UK compared to small numbers of UAE nationals in the UAE. Per capita of ARABS , AD wealth must be massive.

Abu Dhabi could easily fund the Dubai debts one would imagine.
Abu Dhabi is part of the same country as Dubai, so surely Dubai would be bailed out eventually......with more AD control over its errant ways !!
AD cannot afford for the Dubai economy to fail, surely? It is part of their OWN economy.

-- Wed May 26, 2010 1:15 pm --

Having said all that.......it would not surprise me in the least that western investors are due to be robbed or short-changed !! The guys in the sheets will look after their own !!

-- Wed May 26, 2010 1:19 pm --

I see that the Dubai bank boss is "Lootah" ! Is that a name or a description ?

-- Wed May 26, 2010 1:24 pm --

World stock markets are collapsing due to Greece ; Euro; BP oil problems etc etc
"Sell in May and go away ! " is the old adage ......and here it is!!

MORE problems for EVERYONE ...including HSBC et al !!

Countries like Abu Dhabi ; Qatar; Bahrain and Saudi Arabia are the lucky ones .

It will give Qatar ...especially.......buying opportunities in London , now they have a large office in Harrods !
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