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Kid - Please go right ahead and "report" me to my company, I am sure that they would laugh there backsides off at reading your nonsense, if anything further cementing their deep distrust of anything Emirati. They are well aware of my leanings in regards to the UAE (balance being the objective).

As to a full and final analysis of the proposal, it is not possible because as I have found, and it has been confirmed by others, it is not final and has so many gaping holes in regards to where this money is going to come from and whether those loans will be senior or subordinate, guaranteed or not and by whom as to almost relegate the proposal to the realms of "work in progress".

Many of the core issues have just not been addressed. Whilst the goals are well documented - paying so and so over period X, I have grave concerns over the raising of capital to fund the proposal - Issuing bonds to pay back the bankers that you owe money too !!!???

Put another way - thats like being in a bankruptcy court and asking for approval to open a new credit card to pay off the one that has already filed against you in court !!

Put yet another way - Dubai World, were it a race horse, the kindest thing to do would be to and shoot it and stop the disease spreading, but unfortunately the fallout has contaminated so many that a cure needs to be sought. Reading the local press has been funny beyond belief - Ragh3ad X and Lokal Y telling us how wonderful and inspirational this proposal is (clearly without the slightest inkling of the content).

Kid, its not your ignorance that is offensive, its the way that you wear that ignorance with such arrogant pride. So go ahead and report me, I would welcome the chance to openly decry this "proposal" for what it is - a sham.

Dubai World R.I.P.

So here is another take on the situation, from a more macro perspective


http://www.business24-7.ae/banking-finance/finance/dubai-govt-to-own-100-of-nakheel-after-plan-2010-03-25-1.73153

Dubai govt to own 100% of Nakheel after plan

http://www.khaleejtimes.com/DisplayArticle08.asp?xfile=data/business/2010/March/business_March576.xml&section=business

DP World’s Profit Dives

http://www.bloomberg.com/apps/news?pid=20601104&sid=axtnT3G2Lfk4

Dubai World Debt Plan Has Some Creditors Concerned, FT Says


So you take Nakheel out of the group, sell DP World onto the London Stock Exchange - what have you got left ?

Istithmar portfolio in tatters (Debt upto the eye balls and no asset value)
Limitless (actually very LIMITED)
EXOMOS (the Worlds leading private submarine manufacturer !!!)
Hotels (coming to an auction room near you at knock down bargain basement prices)

Oh yeah, debt, debt and more debt .....

face it, the partys over

QED

viking-warrior wrote:Dubai World R.I.P.

So here is another take on the situation, from a more macro perspective


http://www.business24-7.ae/banking-finance/finance/dubai-govt-to-own-100-of-nakheel-after-plan-2010-03-25-1.73153

Dubai govt to own 100% of Nakheel after plan

http://www.khaleejtimes.com/DisplayArticle08.asp?xfile=data/business/2010/March/business_March576.xml&section=business

DP World’s Profit Dives

http://www.bloomberg.com/apps/news?pid=20601104&sid=axtnT3G2Lfk4

Dubai World Debt Plan Has Some Creditors Concerned, FT Says


So you take Nakheel out of the group, sell DP World onto the London Stock Exchange - what have you got left ?

Istithmar portfolio in tatters (Debt upto the eye balls and no asset value)
Limitless (actually very LIMITED)
EXOMOS (the Worlds leading private submarine manufacturer !!!)
Hotels (coming to an auction room near you at knock down bargain basement prices)

Oh yeah, debt, debt and more debt .....

face it, the partys over

QED

Wow…that’s disturbing!!

What a mess indeed!!

I don’t think it’s all over for Dubai, but it will be a long, long, slow and painful climb!!!

Thanks VW for the great insight, which we would’ve never read in the press.

P.S. Pay the Kid no mind! He’s just a jokster!!!

Not me ...

http://www.arabianbusiness.com/584613-where-will-dubais-38bn-shortfall-come-from

'Where will Dubai's $3.8bn shortfall come from?'
by Shane McGinley on Friday, 26 March 2010

According to the Dubai World statement released by the Dubai Government on Thursday the $9.5bn in new funding to restructure Dubai World's debts will be made up of $5.7bn left over from the previous loan from Abu Dhabi and the remainder will come "from internal Dubai Government resources".

However, where this remaining $3.8bn is going to come from is uncertain, a Dubai-based analyst told Arabian Business.

"This is the big issue with Dubai," said Tudor Allin-Khan, chief economist at HC Brokerage in Dubai.

"I don't know where the [$3.8bn] is going to come from. Is it money that is already there or will it come from the Sheikh I don't know?"

However, Allin-Khan said that while it was uncertain it not a worry as he believes the "money is available" and that "there is a lot of money in this country."

Earlier this year, Dubai ordered government departments to cut spending by 15 percent in order to save about $1bn and narrow the emirate's budget deficit and Allin-Khan said he believes this was one of the ways the Dubai Government will raise the $3.8bn.

He predicted that a rise in oil prices and the strengthening of the US dollar, which the UAE dirham is pegged to, will help the situation. He also forecast that some of Dubai World's lucrative assets, such as the QE2 cruise liner, would probably be sold off to finance the new funding required.

However, he concluded that the announcement as a whole signaled that the Dubai Government "is prepared to assist the market."

I'll buy Exomos, but only if Herve is going to run it and I get a job there.

Tom Jones wrote:
Wow…that’s disturbing!!

What a mess indeed!!

I don’t think it’s all over for Dubai, but it will be a long, long, slow and painful climb!!!

Thanks VW for the great insight, which we would’ve never read in the press.

P.S. Pay the Kid no mind! He’s just a jokster!!!

I did not intend to imply that it was "over" for Dubai, more specifically, it's all over for Dubai World. There will be a long drawn out death knell, body writhing in pain, medics in attendance apply pressure pads and miracle cures but all to no avail ...

For sure there will be advisors and a plethora of experts charging fees for the next 3 years but as John Cleese once famously said "What's wrong with it! I'll tell you what's wrong with it. It's dead, that's what's wrong with it ...."

http://www.youtube.com/watch?v=4vuW6tQ0218

So that would be the Norwegian Blue Dubai World!

Its about time Monty Python and the financial situation in Dubai were measured in the same breath. There is a lot of similarity there!



Knight

Python AND Faulty Towers

The list of potential candidates to play Manuel is limitless,

"I know nathing, I from Barcelona" said <please select name from list ............>, the former Chairman/CEO/Managing Director of <please select name of company from list ............>

Then you would have Sheikh Mo as Basil, smacking him with a shoe "You stupid little man..."

In a democracy (sic) this would have already been made into a satirical TV show

Right after "The UAE's got no Talent"
and after "Dancing on thin Ice"

viking-warrior wrote:Kid - Please go right ahead and "report" me to my company, I am sure that they would laugh there backsides off at reading your nonsense, if anything further cementing their deep distrust of anything Emirati. They are well aware of my leanings in regards to the UAE (balance being the objective).

As to a full and final analysis of the proposal, it is not possible because as I have found, and it has been confirmed by others, it is not final and has so many gaping holes in regards to where this money is going to come from and whether those loans will be senior or subordinate, guaranteed or not and by whom as to almost relegate the proposal to the realms of "work in progress".

Many of the core issues have just not been addressed. Whilst the goals are well documented - paying so and so over period X, I have grave concerns over the raising of capital to fund the proposal - Issuing bonds to pay back the bankers that you owe money too !!!???

Put another way - thats like being in a bankruptcy court and asking for approval to open a new credit card to pay off the one that has already filed against you in court !!

Put yet another way - Dubai World, were it a race horse, the kindest thing to do would be to and shoot it and stop the disease spreading, but unfortunately the fallout has contaminated so many that a cure needs to be sought. Reading the local press has been funny beyond belief - Ragh3ad X and Lokal Y telling us how wonderful and inspirational this proposal is (clearly without the slightest inkling of the content).

Kid, its not your ignorance that is offensive, its the way that you wear that ignorance with such arrogant pride. So go ahead and report me, I would welcome the chance to openly decry this "proposal" for what it is - a sham.

Whilst we all know this is a tricky situation (or is it?!) but what is a better alternative? I mean are all the creditors better off without getting anything if DW just declare bankrupt or perhaps at least get something back over x number of years. I think if you were in the position of the current creditors, you will be frustrated no doubt but perhaps this is the best solution at the meantime. At least we all know Abu Dhabi has money and the big brother (although may let the little brother squirm a bit but he) wont let little brother die .....

viking-warrior wrote:Python AND Faulty Towers

Right after "The UAE's got no Talent"
and after "Dancing on thin Ice"

And right before 'The Biggest Loser," and "Wheel of Misfortune!!!!!"

Lets not forget 'The Emperor with no clothes on, after the tide went out'.

Or 'Deal, or no deal'?

Perhaps they'll use the song by Imagination 'It's just an illusion' as the theme tune?

'Who wants to be a fake millionaire'
'The great expat escape'
'Survivors who've done a runner'
'I've got wasta'

Many of the core issues have just not been addressed. Whilst the goals are well documented - paying so and so over period X, I have grave concerns over the raising of capital to fund the proposal - Issuing bonds to pay back the bankers that you owe money too !!!???

Put another way - thats like being in a bankruptcy court and asking for approval to open a new credit card to pay off the one that has already filed against you in court !!

Another firm rule is that the more debt involved, the more people involved and the longer the bubble goes on, the worse the denoument will be. Remember the old saw:

If you owe the bank a million Dollars, you're in trouble, but

If you owe the bank a billion Dollars then your bank is in trouble?

Well, we've just invented a third line:

If you owe the bank a trillion Dollars, we're ALL in trouble.

A great read..
http://www.housepricecrash.co.uk/forum/ ... 1dff04c3bb

Baby Doll

The following article illuminates the concerns that I had/have - today's National

http://www.thenational.ae/apps/pbcs.dll/article?AID=/20100328/BUSINESS/703289934/1005

Banks query fresh funds for Dubai World

Uta Harnischfeger

* Last Updated: March 28. 2010 9:39PM UAE / March 28. 2010 5:39PM GMT

Banks are questioning the source of US$3.5 billion (Dh12.85bn) of fresh funds that form a key part of a restructuring plan submitted to Dubai World creditors last week.

While regional markets have responded positively to the proposals, bankers say the plan raises new questions about the emirate’s ability to repay debts, even if the bulk of Dubai World loans are rolled over.

On Wednesday, the Dubai Government presented a proposal for restructuring $23.5bn of Dubai World debt in which banks were asked to roll over their loans to longer maturities of up to eight years. The offer has not yet been approved by bank creditors, which were owed $14.2bn at the end of last year.

As part of the plan, Dubai is offering $3.8bn of new money, which it said would come “from internal government resources”, without elaborating further.

The restructuring plan looked unlikely “to put the total external debt over gross domestic product on a sustainable trajectory”, the Morgan Stanley analyst Paolo Batori wrote in a report.

Dubai already has $109.5bn of outstanding debt, according to estimates from the IMF.

Under a budget approved in January, the Dubai Government expects to run a Dh6bn deficit this year, its second shortfall in a row. That would be equal to about 2 per cent of GDP. This is despite cutting spending by 6 per cent. Morgan Stanley doubted that the rollover of loans would be sufficient for Dubai to put the total external debt-GDP ratio on a sustainable track.

Credit Suisse said the Dubai Government may not have much cash left to fund other unfinished property projects. “Although we believe this may result in a need to issue bonds, the Government said that there is no intention to issue any bonds in the near term,” the Swiss bank said.

EFG-Hermes said it expected Dubai’s fresh capital injection to come from asset sales and cost savings. However, the Egyptian investment bank called the restructuring “better than expected” and said the “preferential treatment” of sukuk, or Islamic bond, holders “could be positive for coming bond issuances as well as future refinancing and restructuring of international capital markets in general”.

JP Morgan also warned that the plan may be “negative” because it lacked any explicit government guarantees and, with the Dubai Government merely injecting $1.5bn in fresh money into Dubai World, the conglomerate’s creditors would rely on asset sales and dividends going forward. “There is no mention of a government repayment guarantee for Dubai World’s bank creditors,” Zafar Nazim, a London-based analyst at the bank, wrote in a report last Thursday.

“The Government intends to inject only $1.5bn of cash into Dubai World to support its creditors and working capital commitments. In essence, Dubai World’s creditors will be relying upon assets sales and dividends.”

Morgan Stanley also expressed worries that the restructuring may drag out longer than expected.

The bank said hints by Dubai World that the discussions with creditor banks may take a while “can hide lack of consensus on the announced terms, causing potential risks ahead”.

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 ....

If the patient is kept alive, and I stress, IF, then it will only be to harvest the organs at an opportune moment !

* 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

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.

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)

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

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.

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 !