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Wednesday, 16 September 2009

Societe Generale Sues Saad Group in London for $50 Million Debt

Societe Generale SA, France’s second-largest bank by market value, sued a unit of Saad Group, owned by Maan al-Sanea, a billionaire accused of falsifying documents to obtain $10 billion in funds for his personal use.

The complaint was filed at the High Court in London last month against Saad Trading Contracting & Financial Services Co., and released by the tribunal in part yesterday.

Societe Generale claims Saad Trading hasn’t been paid back for a $50 million loan arranged in February and guaranteed by al-Sanea. It’s seeking return of the money plus a commission and legal costs, according to the suit.

Initial posting here:
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Abu Dhabi Companies May Need Help to Service Debt, Fitch Says

Abu Dhabi’s state-linked companies may need government help to service their debt as they borrowed $18 billion from global capital markets to fund their expansion and acquisitions, Fitch Ratings said in a report today.

“State-owned companies are borrowing to support acquisitions and the strategic development plans of Abu Dhabi,” Charles Seville, associate director in the sovereign group at Fitch, wrote in a report today that affirmed the emirate’s ‘AA’ rating with a stable outlook. “With a variety of quasi- sovereign entities borrowing, the risk grows that one may eventually have to call upon the sovereign to help it service debts.”

Abu Dhabi’s government and its state-affiliated firms are leading a borrowing surge from the Gulf region this year. Tourism Development & Investment Co., a state-owned developer of hotels, may raise $1 billion in an Islamic bond offer, following recent state bond sales from Mubadala Development Co. and Aldar Properties PJSC.

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OMV Hopes Iraq Kurdistan Venture Will Send Gas to Turkey by 2015

OMV AG hopes its natural-gas production venture in the Kurdistan area of Iraq with Mol Nyrt., Crescent Petroleum and Dana Gas PJSC will deliver the fuel to Turkey by 2015.

OMV hopes for a resolution this year between the Kurdish government and Iraq’s central government in Baghdad on profit- sharing, Werner Auli, the company’s head of gas, told reporters in Baku, Azerbaijan, today.END

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Bahrain's new bourse eyes Syria, Jordan mkt

The Bahrain Financial Exchange (BFX), set to begin operations next year, plans to attract Middle Eastern equity issuers from markets outside the Gulf Arab region, in particular from Jordan and Syria, an executive said.

"We're looking at markets in the region that are not targeted by other major players," Arshad Khan, director at Indian exchange operator Financial Technologies, which owns BFX, told news agency Reuters late on Tuesday.

"In Syria and Jordan there is a large base of potential issuers," he said.

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UAE faces possibility of contraction in 2009

The UAE's central bank will keep interest rates low to spur growth, Governor Sultan Nasser al-Suweidi was quoted as saying on Wednesday, as the economy faces the possibility of contraction in 2009.

Suweidi's comments were carried in Arabic language daily Al-Bayan. The UAE's overnight repurchase rate stands at 1%.

"The prospects for UAE's economic growth will be reduced in 2009 from a high single-digit figure to a low growth rate or maybe even negative, due to the current global financial crisis," the newspaper quoted Suweidi as saying.

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Abu Dhabi’s Rating Affirmed ‘AA’ With Stable Outlook at Fitch

Abu Dhabi’s long-term foreign currency issuer default rating was affirmed at ‘AA’ with a stable outlook at Fitch Ratings.

“Abu Dhabi’s strong balance sheet enables it to weather most conceivable shocks,” said Charles Seville, associate director in the sovereign group at Fitch. The United Arab Emirates’ country ceiling, which applies to Abu Dhabi, was affirmed at ‘AA+’.END

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Dubai Metro

Dubai Needs Bonds to Pay $6.8 Billion Debt, Deutsche Bank Says

Dubai, the United Arab Emirates’ sheikdom most severely hurt by the credit crunch, may be dependent on the second part of a bond offering to meet debt obligations of $6.8 billion next quarter, Deutsche Bank AG said.

“For Dubai, the peak of the redemption profile is in the fourth quarter with $6.8 billion due,” Caroline Grady, a London-based economist for the bank, wrote in a note to clients received by Bloomberg today. “Assuming the second $10 billion government of Dubai bond is issued in the coming months, we don’t see any issues with Dubai’s ability to pay.”

Rating firms have downgraded Dubai state-owned companies on concern the emirate may not have sufficient funds to support its struggling entities after the credit crisis ended a four-year real-estate boom in Dubai and forced the U.A.E. government to bail out the two biggest mortgage lenders.

Listing of Dubai Debt
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Nasdaq Dubai market cap up 98% in crisis-ridden 2009

Defying local, regional and international trends, Nasdaq Dubai has seen the market capitalisation of its listed firms rise by an impressive 98 per cent this year. It rose from $14.13 billion (Dh52.5bn) on Dec-ember 31, 2008, to $28.14bn as of yesterday, Emirates Business research reveals.

The Dubai-based international exchange, which has had its share of teething problems since it was first launched as the Dubai International Financial Exchange on September 26, 2005, has seen stock prices of some firms jump by as much as 74 per cent in 2009.

"Since rebranding last November, we have increased awareness of our market and strengthened links with regional and international investors by bringing on new members, including some we expect to announce shortly," Jeffrey Singer, Chief Executive of Nasdaq Dubai, told Emirates Business.

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FDI flows to Arab World fall 6.3% on global slowdown

Foreign Direct Investment (FDI) inflows to the Arab World fell 6.3 per cent to $60 billion (Dh220bn) in 2008 from $64bn in the previous year, said a UN study.

They are expected to go down further this year.

The Economic and Social Commission for Western Asia (ESCWA) for the UN said the decline in FDI is due to the global economic slowdown and its severe impact on transnational corporations, which has in turn led to delays in the implementation of a number of investment projects in several Middle Eastern countries.

Overspending and public funds drain foreign assets

Saudi Arabia is draining the massive foreign assets it has accumulated over the past seven boom years to meet higher budget commitments, shore up domestic liquidity and support local funds, a key Saudi investment firm said yesterday.

The withdrawal of nearly SR217 billion (Dh214.8bn) in the first seven months of 2009 indicates the world's oil giant is heavily overshooting budgeted expenditure to offset a sharp downturn in private sector activity, boosting its deposits with local banks, and channeling promised liquidity into public funds, the Riyadh-based Jadwa Investment said in a study sent to Emirates Business.

The decline in the kingdom's assets this year reversed years of a steady growth that saw those investments soaring by nearly $378bn (Dh1.38 trillion) between the end of 2003 and the end of 2008, the study said.

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Contractors considering legal action against Tabreed

Contractors are mulling legal action against district cooling developer Tabreed for non-payment as the Dubai-listed firm grapples with liquidity issues due to the construction slowdown.

Tabreed, in which Abu Dhabi's state-run investment firm Mubadala has a stake, has withheld payments to some of its leading contractors, seeking discounts for some completed projects.

Some leading contractors working for Tabreed said the firm has not paid them since the financial crisis began and has even written to them that future payments will be contingent on reaching agreements on the discounts.

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SBI launches services from DIFC

The State Bank of India (SBI) has started providing a complete range of banking services from its base in the Dubai International Financial Centre (DIFC), the bank announced on Tuesday.

The SBI has received a full banking licence from the regulator, the Dubai Financial Services Authority (DFSA), which enables its DIFC branch to accept deposits and provide credit, subject to the regulations of the DFSA.

The bank has also obtained a retail endorsement to its licence, which enables it to arrange investments for retail customers and offer credit to small and medium enterprises (SME).

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Al Gosaibi ‘owes Mashreq $400m’

Mashreq bank is owed more than US$400 million (Dh1.47 billion) by the troubled Saudi conglomerate Ahmad Hamad Al Gosaibi and Brothers (AHAB), according to a letter the bank sent demanding repayment. The revelation marks the first time full details about a UAE bank’s exposure to Al Gosaibi have been made public.

The Dubai-based lender included the letter, written on May 20, as an exhibit in a New York court case against the Al Gosaibi group, a family-owned firm that has defaulted on its financial obligations and is in the middle of a sweeping debt restructuring.

Mashreq confirmed its $400m exposure to AHAB in a statement yesterday, saying the figure included a combination of $225m in currency swaps, loans in which multiple banks took part and direct loans to the group.

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Emirates Steel swoops on GCC rival

Emirates Steel Industries has gained control of 45 per cent of the UAE steel market and hopes to grow even bigger through a major GCC acquisition within a month, the company’s chairman said.

An expansion in output by Emirates Steel (ESI) that began in June has cut the country’s imports of steel significantly and left the firm with a larger share of the construction steel market than previously forecast, said Hussain al Nowais.

The state-owned ESI, which is based in Musaffah, aims to become the Gulf’s largest steel company as part of the Government’s efforts to develop heavy industry in the emirate.

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Dubai Group had ‘waves of layoffs’

Dubai Holding {{lang|ar|دبي القابضة}}Image via Wikipedia

Dubai Group, the financial services and investment arm of Dubai Holdings, has cut more than 70 per cent of its staff since the financial crisis hit last autumn, an official said.

The disclosure comes as Dubai Holdings moves closer to consolidating its vast network of companies.

“Obviously, we continue to face challenges and unfortunately we had to let more staff go,” said Huda Buhumaid, the group’s managing director of marketing and communications. “There have been waves of layoffs since last November."

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Bloomberg rocks table at Istithmar’s delicate game

Dubai World (DW) has become the litmus test for the future of Dubai Inc. The state-owned conglomerate, with interests ranging from ports to property and investment, certainly symbolises the past business achievements of the emirate, but increasingly has come to encapsulate the acute problems facing Dubai in the wake of the financial crisis.

With its US$60 billion (Dh220.38bn) of debts and liabilities, DW accounts for the bulk of Dubai’s admitted $80bn debts (though many analysts believe the total is higher); the $3.5bn sukuk held by DW’s subsidiary Nakheel, due for repayment in December, is regarded in international financial circles as the single most urgent issue Dubai has to resolve.

Now further questions have been cast over the conglomerate. A report by Bloomberg this week on Istithmar World, DW’s international private equity arm, alleged that the fund is under severe financial pressure, going further than any previous assessment of DW’s problems. It says Istithmar may become the first sovereign wealth fund to liquidate in the face of falling asset values, and that it, or its assets, will “probably” be sold in order to help DW repay its debts, estimated at $12bn or more.

List of Dubai debts.
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Ex-Nakheel executives in court

Four Australians gave false information about the ownership and value of land as part of a fraud that ran to more than Dh44 million (US$12m), a court was told yesterday.

Two of the men, former executives of the property company Nakheel, were denied bail when they appeared in the dock for the first time.

MJ, the chief executive of the Dubai Waterfront project, and ML, his deputy, were charged along with fellow Australians AB, the Waterfront’s legal affairs manager, and AR, a businessman. The latter two remain at large.

For story from early August:

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The much anticipated sale of century in Iran: privatization of 50% of Iran's communication organization cancelled!!! (Unverified)

This is bizarre! Everyone was bracing for IRGC to purchase that!!

No reason was offered!!!

Notable: on Sunday, Tehran's stock marked was closed; unprecedentedly!!

For Persian readers: