DUBAI: Dubai World's debt crisis is likely to result in a large-scale sell-off of assets as varied as the QE2 cruise liner, Turnberry championship golf course, and a raft of properties worldwide.
Mr Paul Reynolds, head of Rothschild's advisory operations in the Middle East, was this week asked to assess the group's assets alongside Mr Aidan Birkett of Deloitte, who was appointed last Wednesday.
A spokesman for the Dubai Department of Finance told Britain's Telegraph newspaper that all options and asset sales would be considered, except for the DP World subsidiary that bought P&O, the British port company.
'I'm sure all of the assets of Dubai World will be reviewed,' he was quoted as saying.
'It's part of the restructuring process, though it's too early to say whether there's any sale in mind.'
Dubai rocked the financial world last Wednesday when it said it would ask creditors of Dubai World, the conglomerate behind its rapid expansion, and Nakheel, builder of its palm-shaped islands, to agree to let it cease payments on billions of dollars of debts until a restructuring agreement has been negotiated.
Abu Dhabi - the richest state in the United Arab Emirates (UAE), the federation to which Dubai belongs - is seen as one of the main buyers of Dubai's assets. Analysts say Abu Dhabi will probably insist on Dubai selling some assets as part of its conditions for rescuing it.
On Sunday, the Abu Dhabi-based UAE central bank moved to quell fears that Dubai's debt crisis could escalate, by promising to provide liquidity for both foreign and local banks that had been expecting repayments, effectively covering any short- term losses.
Last year, when rumours about Dubai's debt problems first surfaced, sources said Abu Dhabi had offered to buy Emirates airline, but Dubai had refused to part with its flagship carrier.
Abu Dhabi is also said to be interested in Emaar, the property company that owns the Burj Dubai skyscraper, the Dubai Mall shopping centre, and Dubai's aluminium company Dubal, the Telegraph reported.
Dubai World's venture capital arm, Istithmar, owns stakes in global assets, including MGM Mirage, the Las Vegas gambling operation; Barneys, the New York department store; Cirque du Soleil; South African entrepreneur Sol Kerzner's hotel chain; and Standard Chartered Bank.
The group's London properties include Adelphi on The Strand and the Grand Buildings in Trafalgar Square.
Source: Straits Times, 1 Dec 2009
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