A senior member of Dubai's royal family stepped in late Thursday to ease investor concerns that one of the sheikdom's main business conglomerates may default on its debt.
"Our intervention in Dubai World was carefully planned and reflects its specific financial position," said Sheik Ahmed bin Saeed al Maktoum, who heads a key Dubai finance committee and is chairman of its airline Emirates.
"The government is spearheading the restructuring of this commercial operation in the full knowledge of how the markets would react. We understand the concerns of the market and the creditors in particular. However we have had to intervene because of the need to take decisive action to address its particular debt burden," he said in an emailed statement.
"Like most global cities, Dubai has experienced its share of economic and social challenges in this global downturn. No market is immune from economic issues. This is a sensible business decision. We want to ensure resources are deployed in the full knowledge that they are used to enhance the businesses of the Dubai World Group, build on the restructuring that has already been taking place and ensure long term commercial success. Further information will be made available early next week," he said.
Shares in London plummeted Thursday a day after the sheikdom asked for a standstill on Dubai World's debt and dramatic restructuring of the company that has $60 billion in liabilities.END
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