30 November 2009
Dear Experts , Can someone help with text about Dubai Financial Crisis, how it originated and how it is going to impact globally and would India be affected by all this? Actually, I am not able to find enough text about this in newspaper. Kindly help.
01 December 2009
Though I can't help you with text, I can give you some insigbt into the Dubai Crisis. Dubai World is a Government owned Company.It has a subsidiary named Nakheel which deals in real estate. It had taken loans from many financial institutions for developing Dubai. It spent a lot of amount on developing real estate and now there are not enough buyers of those properties because of global recession. Due to this the Company is not in a position to repay its loan instalments. Since all those loans have been guaranteed by Dubai Government, Dubai Government has requested the lenders to extend time for redemption. Total liabilities of Dubai World are $60 Bn. It is not such a big amount to have a big impact on the world economy. As far as India is concerned, real estate sector and banking sector have some exposure there, though not big enough to have much impact. But in case those Indians who are working there,lose their jobs, then Indian job market may feel pressure. UAE is big importer of Indian items, our exports may also suffer a bit.
01 December 2009
Dubai World unveiled details of a restructuring plan on Monday that would include its main property firms but leave other companies untouched in a move covering $26 billion in debt that could include asset sales.
"The total value of debt carried by the companies subject to the restructuring process amounts to approximately $26 billion, of which approximately $6 billion relates to the Nakheel sukuk (Islamic bonds)," a company statement said.
The government-controlled holding company, at the centre of an estimated $59 billion debt storm, said that restructuring efforts would include Nakheel, builder of Dubai's palm-shaped islands, and property firm Limitless World.
"Initial discussions have commenced with the banks of Dubai World and are proceeding on a constructive basis," it said.
The efforts would not include other firms, which it said were financially stable, such as Infinity World Holding, Istithmar World and Ports & Free Zone World, which includes DP World, Economic Zones World, P&O Ferries and Jebel Ali Free Zone, or JAFZA.
CAclubindia
