Prince Alwaleed bin Talal, the billionaire Saudi investor, said banks that loaned money to Dubai World can’t claim to be victims of the emirate’s debt crisis because they should have understood the risks.
“These banks are very mature banks, and they have to differentiate between a corporate loan and a sovereign loan,” Alwaleed, 54, said yesterday in an interview on Bloomberg Television. “When things go sour, you can’t have some banks in the West going to Dubai and saying ‘oops’ and crying wolf and saying, ‘You should have guaranteed those loans.’”
Dubai World, the state-controlled investment firm whose assets include a stake in Las Vegas casino company MGM Mirage, is seeking to reschedule payments on about $26 billion of debt. Standard & Poor’s said on Oct. 15 there was a “significant” likelihood that Dubai would help government-related entities such as Dubai World meet debt obligations. Dubai’s government told creditors of Dubai World on Nov. 30 that they should help in a restructuring of the holding company because the government hasn’t guaranteed the debt.
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