Exactly three years after laying the foundation stone of the proposed Rs.1,500 crore Smart City Kochi IT project, Chief Minister V.S. Achuthanandan Tuesday said the project builders are delaying it due to financial problems.
Addressing reporters after the weekly cabinet meeting here, he said Smart City Dubai is putting up conditions that were not signed in the agreement.
'After the foundation stone, they have not been able to put another stone above that. May be they are short of funds and hence they want us to give them land in the project which they can sell off and then begin construction. That is in no way possible and we won't allow that,' Achuthanandan said.
Tuesday, 16 November 2010
UPDATE 1-Haircuts, new cash in Dubai Hldg restructuring -FT | Reuters (Analysis)
The restructuring of Dubai Holding [DUBAHC.UL] is under way and will include a haircut for creditors and injections of fresh government funds, the vice chairman of Dubai's top fiscal body told the Financial Times.
Mohammed al-Shaibani, who is also director of the Dubai ruler's court, told the FT in an interview that the government had so far pumped $2 billion into the conglomerate, which is owned by the Gulf emirate's ruler.
A year ago, Dubai's other flagship state-owned conglomerate, Dubai World [DBWLD.UL], shocked global markets when it asked for a standstill agreement on $26 billion worth of debt.
Mohammed al-Shaibani, who is also director of the Dubai ruler's court, told the FT in an interview that the government had so far pumped $2 billion into the conglomerate, which is owned by the Gulf emirate's ruler.
A year ago, Dubai's other flagship state-owned conglomerate, Dubai World [DBWLD.UL], shocked global markets when it asked for a standstill agreement on $26 billion worth of debt.
Etisalat rating not impacted until offer for Zain becomes binding, says S&P - bi-me.com
Standard & Poor's Ratings Services said today that its ratings and outlook on Emirates Telecommunications Corp. (Etisalat) (AA-/Stable/A-1+), the former incumbent fixed-line and leading mobile telecoms operator in the United Arab Emirates, are not immediately affected by Etisalat's announcement that its offer to buy a 51% stake in Mobile Telecommunications Company (Zain)--for about US$12 billion at KWD 1.70 per share--has become binding.
"We understand that the offer is subject to multiple conditions. Etisalat will have the option not to proceed with the deal if these conditions are not met or if it is unsatisfied with the results of due diligence. We understand that the binding offer is a requirement to start formal due diligence and that the parties have not yet negotiated any principal terms and conditions. We assume that Etisalat's recently announced plans to issue US$7 billion in medium-term notes, which could significantly weaken its financial profile, will materialize only if the transaction happens," the ratings agency said.
"Standard & Poor's will continue to monitor any developments related to this potential transaction and the possible impact on Etisalat's credit profile. Should we see the likelihood of the transaction increasing, the ratings on Etisalat would likely be placed on CreditWatch to assess the credit implications for the company," S&P added.
"We understand that the offer is subject to multiple conditions. Etisalat will have the option not to proceed with the deal if these conditions are not met or if it is unsatisfied with the results of due diligence. We understand that the binding offer is a requirement to start formal due diligence and that the parties have not yet negotiated any principal terms and conditions. We assume that Etisalat's recently announced plans to issue US$7 billion in medium-term notes, which could significantly weaken its financial profile, will materialize only if the transaction happens," the ratings agency said.
"Standard & Poor's will continue to monitor any developments related to this potential transaction and the possible impact on Etisalat's credit profile. Should we see the likelihood of the transaction increasing, the ratings on Etisalat would likely be placed on CreditWatch to assess the credit implications for the company," S&P added.
Felix Arabia: Entrepreneurial Arabs will make it better for the next generation
The first few days of November have quickly become known as Entrepreneurship Week in Dubai. The Dubai School of Government kicked off the week with a panel on women's entrepreneurship in the Gulf, featuring leading businesswomen from Abu Dhabi, Dubai and the region. The next day at the Young Arab Leaders Entrepreneurship Summit, cross-generational leadership was represented, with Sheikh Mohammed bin Rashid, the Prime Minister and Ruler of Dubai, and his son Crown Prince Sheikh Hamdan attending.
The youth summit, which I was involved in organising, was a Who's Who of Arab business leaders, including Rabea Ataya, the founder of Bayt.com. Habib Hadad, the founder of Yamli.com, Ihsan Jawad, the founder of Zawya.com, Dr Naif al Mutawa, the creator of The 99 comics, and Sheikh Khaled bin Zayed, the founder of the Bin Zayed Group.
The list of Emirati and regional guiding lights in entrepreneurship goes on and on. But perhaps the most important element among the 500 or so attendees were the scores of students and aspiring entrepreneurs who were there to learn from those who had gone before.
The youth summit, which I was involved in organising, was a Who's Who of Arab business leaders, including Rabea Ataya, the founder of Bayt.com. Habib Hadad, the founder of Yamli.com, Ihsan Jawad, the founder of Zawya.com, Dr Naif al Mutawa, the creator of The 99 comics, and Sheikh Khaled bin Zayed, the founder of the Bin Zayed Group.
The list of Emirati and regional guiding lights in entrepreneurship goes on and on. But perhaps the most important element among the 500 or so attendees were the scores of students and aspiring entrepreneurs who were there to learn from those who had gone before.
FT.com / Lex - Abu Dhabi: undertsandably cautious
As popular corporate buzz words go, “emerging markets” makes almost every boardroom’s top ten. So it is strange to hear that Aabar, the Abu Dhabi investment vehicle, has sold its stake in Banco Santander’s Brazilian unit, and may buy a stake in telecom operators in the US or Europe.
But is selling out of emerging markets and buying into developed ones such a bad idea? The “buy low, sell high” rule is on Aabar’s side. Brazil’s main Bovespa index trades at over 13 times company earnings, while the S&P Euro350 telecom index is valued one-third less. And while the Bovespa is flirting with all-time highs and may yet prove to be an incipient bubble, the European index is still one-quarter below its peak. Furthermore, the strong appreciation of the Brazilian real over the last two years has inflated prices for foreigners, and brought with it a new tax on foreign capital inflows.
Of course, developed nations generally have lower growth prospects, but a degree of caution from Aabar and its peers is understandable, particularly when the Gulf region’s banking system has not yet bottomed out. Indeed, the first nine months of the year saw Abu Dhabi Commercial Bank alone record impairments of more than $700m. And monetary policy remains focused on stabilising financial institutions rather than combating inflation, notes the Economist Intelligence Unit.
But is selling out of emerging markets and buying into developed ones such a bad idea? The “buy low, sell high” rule is on Aabar’s side. Brazil’s main Bovespa index trades at over 13 times company earnings, while the S&P Euro350 telecom index is valued one-third less. And while the Bovespa is flirting with all-time highs and may yet prove to be an incipient bubble, the European index is still one-quarter below its peak. Furthermore, the strong appreciation of the Brazilian real over the last two years has inflated prices for foreigners, and brought with it a new tax on foreign capital inflows.
Of course, developed nations generally have lower growth prospects, but a degree of caution from Aabar and its peers is understandable, particularly when the Gulf region’s banking system has not yet bottomed out. Indeed, the first nine months of the year saw Abu Dhabi Commercial Bank alone record impairments of more than $700m. And monetary policy remains focused on stabilising financial institutions rather than combating inflation, notes the Economist Intelligence Unit.
Syria Gets Six Pre-Qualifying Bids for the Country's Third Mobile License - Bloomberg
Six Arab and foreign companies submitted bids in Syria’s pre-qualifying stage for a third mobile telecommunications license, Mohammed al-Jalali, assistant minister of communications and technology, said, according to the official Syrian Arab News Agency.
The companies include Emirates Telecommunications Corp., the bigger of two phone companies in the United Arab Emirates, Saudi Telecom Co., Qatar Telecom, Turkcell Iletisim Hizmetleri AS, Turkey’s biggest mobile-phone operator, France Telecom SA, the country’s largest phone company and Iran’s TAMCO, the newswire reported, citing Jalili.
The bids will be evaluated by a joint committee from the ministry and a German advisory company to pick preliminary candidates for the second phase of the competition, which will be announced next month.
The companies include Emirates Telecommunications Corp., the bigger of two phone companies in the United Arab Emirates, Saudi Telecom Co., Qatar Telecom, Turkcell Iletisim Hizmetleri AS, Turkey’s biggest mobile-phone operator, France Telecom SA, the country’s largest phone company and Iran’s TAMCO, the newswire reported, citing Jalili.
The bids will be evaluated by a joint committee from the ministry and a German advisory company to pick preliminary candidates for the second phase of the competition, which will be announced next month.
Bank Negara, Etisalat, Senegal, Pakistan: Islamic Bond Alert - Bloomberg
The following borrowers are expected to sell Islamic bonds, which use asset returns to pay investors to comply with the religion’s ban on interest.
Global sales of sukuk fell 29 percent to $13.7 billion so far this year from the same period in 2009, according to data compiled by Bloomberg. Issuance totaled $20.2 billion last year, up from $14.1 billion in 2008.
Global sales of sukuk fell 29 percent to $13.7 billion so far this year from the same period in 2009, according to data compiled by Bloomberg. Issuance totaled $20.2 billion last year, up from $14.1 billion in 2008.
Aldar Properties ratings lowered to 'B' on tough trading conditions- bi-me.com
Standard & Poor's Ratings Services said today that it lowered its long-term corporate credit rating on Abu Dhabi-based property company Aldar Properties PJSC (Aldar) to 'B' from 'BB-'.
Standard & Poor's also said that it placed the 'B' long-term and 'B' short-term ratings on CreditWatch with negative implications.
"The downgrade reflects our view of the very challenging real estate market conditions in Abu Dhabi and the reliance of Aldar's future earnings and cash flow on continued demand for both the sale and rental of property and land," explained Standard & Poor's credit analyst Tommy Trask.
Standard & Poor's also said that it placed the 'B' long-term and 'B' short-term ratings on CreditWatch with negative implications.
"The downgrade reflects our view of the very challenging real estate market conditions in Abu Dhabi and the reliance of Aldar's future earnings and cash flow on continued demand for both the sale and rental of property and land," explained Standard & Poor's credit analyst Tommy Trask.
FT.com / Middle East - Bahrain seeks to retain finance lead
When governments across the world want to learn more about Islamic banking, a small but rapidly expanding niche of finance that adheres to Muslim principles, the first port of call is often Bahrain.
However, with Bahrain’s position as the Arab world’s financial centre now seized by Dubai – at least in terms of international investment banking – the question remains how the small Gulf kingdom can remain the region’s dominant hub for Islamic finance.
“The international banking business is probably gone, so they [the Bahraini authorities] need to hold on to their edge in Islamic finance,” says a senior Islamic banker in Manama.
However, with Bahrain’s position as the Arab world’s financial centre now seized by Dubai – at least in terms of international investment banking – the question remains how the small Gulf kingdom can remain the region’s dominant hub for Islamic finance.
“The international banking business is probably gone, so they [the Bahraini authorities] need to hold on to their edge in Islamic finance,” says a senior Islamic banker in Manama.
FT.com - Iranian group seeks Daewoo finance
Entekhab Industrial Group, an unlisted Iranian home appliances company, is searching for financing to complete its acquisition of South Korea’s Daewoo Electronics in the face of international sanctions over Iran’s nuclear programme.
“It will be very, very difficult to get loans under sanctions but we’ll do it,” Amin Mannani, Entekhab’s deputy head, told the Financial Times.
In a rare example of an Iranian company acquiring a foreign one, Entekhab signed a $518m contract just over a week ago to buy South Korea’s Daewoo Electronics from its creditors. This ended a more than 10-year search for a buyer for the former Daewoo unit, which makes washing machines, refrigerators and microwave ovens.
“It will be very, very difficult to get loans under sanctions but we’ll do it,” Amin Mannani, Entekhab’s deputy head, told the Financial Times.
In a rare example of an Iranian company acquiring a foreign one, Entekhab signed a $518m contract just over a week ago to buy South Korea’s Daewoo Electronics from its creditors. This ended a more than 10-year search for a buyer for the former Daewoo unit, which makes washing machines, refrigerators and microwave ovens.
FT.com / Middle East - Dubai Holding thrown $2bn lifeline
The Dubai government has taken control of the financial restructuring of Dubai Holding, pumping $2bn into a troubled conglomerate that once symbolised the Gulf emirate’s extravagant development.
The same elite committee that oversaw the $25bn shake up of government-owned Dubai World has turned its attention to the emirate’s second large revamp – a lower-key restructuring of about $12bn in debts at the group of companies owned by Sheikh Mohammed bin Rashid al-Maktoum, Dubai’s ruler.
According to Mohammed al-Shaibani, the powerful director of the Ruler’s Court, the government has already injected $2bn into Dubai Holding and is willing to put more capital into the lossmaking conglomerate that spans property, business parks and financial investments. However, it also expects banks to accept some of the pain, as was the case in the Dubai World restructuring.
The same elite committee that oversaw the $25bn shake up of government-owned Dubai World has turned its attention to the emirate’s second large revamp – a lower-key restructuring of about $12bn in debts at the group of companies owned by Sheikh Mohammed bin Rashid al-Maktoum, Dubai’s ruler.
According to Mohammed al-Shaibani, the powerful director of the Ruler’s Court, the government has already injected $2bn into Dubai Holding and is willing to put more capital into the lossmaking conglomerate that spans property, business parks and financial investments. However, it also expects banks to accept some of the pain, as was the case in the Dubai World restructuring.
FT.com / Middle East - Hard man battles to complete ‘the Task’
Inside the Diwan, the Dubai Ruler’s Court and traditional seat of power, Mohammed al-Shaibani reflects on a turbulent year.
Accustomed to working in the shadows, the veteran aide to Sheikh Mohammed bin Rashid al-Maktoum has been handed the very public task of steering the emirate out of its debt crisis. Mr Shaibani has earned plaudits from some for cleaning up years of excess with an anti-corruption campaign, but criticism from others who see his moves as a political purge.
Now, in a rare interview, the director of the court says an emirate saddled with about $110bn debt still has work to do but is turning the corner. “This is definitely not a cakewalk,” he says. “During the boom we were focusing on quick returns; overseas investments. We left something very valuable behind – that Dubai is about logistics, re-exports, tourism and services. That’s what we’re about.”
Accustomed to working in the shadows, the veteran aide to Sheikh Mohammed bin Rashid al-Maktoum has been handed the very public task of steering the emirate out of its debt crisis. Mr Shaibani has earned plaudits from some for cleaning up years of excess with an anti-corruption campaign, but criticism from others who see his moves as a political purge.
Now, in a rare interview, the director of the court says an emirate saddled with about $110bn debt still has work to do but is turning the corner. “This is definitely not a cakewalk,” he says. “During the boom we were focusing on quick returns; overseas investments. We left something very valuable behind – that Dubai is about logistics, re-exports, tourism and services. That’s what we’re about.”