Friday 27 November 2009

Tough love needed to rebuild the ruins

Sultan bin Sulayem, the chairman of Dubai World, was yesterday on the hajj, the Muslim pilgrimage, where he would have been with millions fasting and praying for forgiveness on Mount Arafat.

IInternational investors are in a less forgiving mood after the announcement that Dubai would be seeking a standstill agreement on the government holding company's debt pile, most immediately $4bn (€2.7bn, £2.4bn) owed on a bond held by the Nakheel property subsidiary that comes due on December 14.

The restructuring of Du-bai World's debt has been in the works for some time, but investors had grown confident that the Islamic bond, or sukuk, guaranteed by state-owned Dubai World, would be treated separately and paid off to maintain confidence in the trade and finance-oriented economy.

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