Dubai investors were given the jitters at the end of last week when the investment arm of Dubai International Capital, Dubai Holding, asked for a delay in the payment of its first tranche of debt.
The request, for repayments to begin in September, instead of the agreed date of June, came only a few days after Dubai World finally reached agreement with its creditors over its massive $59 billion debt.
Dubai Holding is a much smaller company than Dubai World and one that is wholly owned by Sheikh Mohammed bin Rasid al Maktoum – which made the request for payments to be pushed back more unexpected.
The company stated that the delays would allow time for agreement of a ‘longer term plan’ and would also ‘maximise the value’ of business for shareholders.
Sultan bin Saeed al-Mansoori, Minister of Finance for the UAE, predicted that Dubai Holding would be able to get through the crisis without the aid of a government bail-out, stating the Dubai expected to see 2.5 per cent growth over 2010. A number of economists greeted this prediction with caution, including Banque Saudi Fransi chief economist in Riyadh, John Sfakianakis, who described it as ‘optimistic’ saying he expected only 2 per cent growth, ‘the bulk of’ which will come from Abu Dhabi, not Dubai.Andrew Reid, Staff Writer, Gulf Jobs Market News