Aidan Birkett, the man charged with sorting out Dubai World's $26 billion debt pile, could face an uphill struggle to restructure the company that's at the heart of the emirate's financial crisis.
"It's a very large and complex restructuring with an enormous amount of debt so it's not a small assignment," said Chris Ward, chief executive of financial advisory services at Deloitte in the Middle East. "There will be challenges."
Birkett, 56, managing director of Deloitte's corporate finance department, was parachuted in last month as chief restructuring officer of Dubai World. He has little time to work his magic, with creditors already baying for blood as the maturity of a $3.52 billion sukuk, or Islamic bond, issued by Dubai World's real-estate unit Nakheel approaches on Dec. 14.
Having led Deloitte's 1,200-strong corporate finance team in the U.K. for five years, Birkett is an experienced hand in the world of company restructuring but less knowledgeable about the complexities of doing business in the Persian Gulf emirates and the idiosyncrasies of Dubai's secretive sheiks.
In the past he has restructured over $100 billion of debt and successes include the overhauling of U.K companies MyTravel, London underground contractor Metronet and communications group Energis, which collapsed in 2002.
Bankers say his biggest challenge will be getting Dubai's government to listen. It's unclear whether he'll be given a free hand to remodel Dubai World without the interference of the emirate's political elite.
"When a foreigner comes into the country, ultimately what happens is that the door closes, people speak Arabic, they come out and they say that's the deal," said a Dubai-based investment banker, who asked not to be named.
Of course Birkett isn't alone in his task. Alix Partners has been retained to fix Dubai World's operations and on the financial side of the business blue-blooded advisers Rothschild and Moelis & Co. will lend a hand.
"He can prepare the deal but as a foreigner coming in at a high level, your degrees of freedom are limited," the Dubai-based banker added.
A spokesman for Dubai World declined to comment on the details of Birkett's remit. Deloitte declined requests from Zawya Dow Jones for an interview with Birkett.
Western executives at Dubai's biggest state-owned companies have very little power with ultimate management authority resting with Dubai's ruler, Sheik Mohammed bin Rashid Al Maktoum and his inner-circle of closely-knit advisors usually drawn from influential local families.
People who have worked with Birkett in the past say he is a tough operator and will demand that his advice is heeded by Dubai's powerful sheiks.
"He is robust and he's absolutely straight, no nonsense," said Deloitte's Ward in Dubai. "He doesn't have to upset everybody along the way but he gets his own way."
The scale of Birkett's task at Dubai World is vast, dwarfing his other projects. The company has close to $60 billion worth of liabilities, and assets spread across the globe including Turnberry golf resort in the west of Scotland and a stake in the company behind London waxworks museum Madame Tussauds.
Industry experts think much of Birkett's time will be taken up with reaching an agreement with Dubai's creditors and that his options are limited because most of Dubai World's assets were purchased with debt, complicating a straight sale of its investments.
"If they sell the asset they will have to pay back the debt that is linked to it," said one banker in Dubai who declined to be named.
Only time will tell whether Dubai's rulers will listen to Birkett's advice on how fix their broken corporate jewel.
-By Alex Delmar-Morgan, Dow Jones Newswires; +9714 374 8044; alex.delmar-morgan@dowjones.com
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