A year after Dubai’s corporate flagship stunned markets with plans to freeze payments on $25 billion in loans, the emirate is still struggling to reduce a total debt load more than four times that amount.
The immediate crisis triggered by Dubai World’s announcement last Nov. 25 has passed. Lenders to the government- owned group have agreed to accept a delay in repayments of $14.4 billion, and access to credit in the Middle East’s once- flourishing financial services hub is starting to ease after the worst recession since the 1930s.
Dubai and its state-controlled companies are grappling now to service debt that Barclays Capital estimated in a September report to total about $112 billion -- equal to more than 140 percent of its gross domestic product. They amassed the loans during years of frenetic growth in the property and tourism industries. One of seven sheikhdoms comprising the United Arab Emirates, Dubai lacks the energy wealth of neighboring Abu Dhabi and must boost revenue from trade and other traditional businesses and by selling assets, analysts say.
No comments:
Post a Comment