Monday 8 November 2010

Hope and fear over Dubai debt

DP World's reawakened interest in the international capital markets signals another step in the recovery of Dubai Inc, but the emirate still faces uncertainties over how it will refinance a significant amount of debt coming due over the next two years.

Dubai's debt situation has been under the microscope since Dubai World, one of the emirate's biggest conglomerates, sought a standstill on debt repayments almost a year ago. Initial fears of a sovereign default proved unfounded, and the ensuing European debt crisis soon stole the spotlight.

But Dubai has remained under scrutiny because of the sheer size of its total debt, estimated at US$109 billion (Dh400.3bn) by the IMF in February.

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