The government of Dubai announced a unilateral moratorium on the $59 billion debt mountain of its biggest corporate entity, Dubai World, a conglomerate that owns ports and real estate around the world, 26 November. The government says it has appointed DeLoitte LLP to advise it on restructuring Dubai World.
The news caused stock markets in Europe to decline sharply because of worries that Dubai’s massive investments in companies ranging from Porsche and Daimler to the London Stock Exchange may need to be liquidated. Banks were particularly hit. Rating agencies downgraded the debt of several Dubai government-run companies in response.
Dubai’s ruler, Mohammed Bin Rashid al-Maktoum, dropped several key aides involved in Dubai’s real estate boom 23 November, in order to assert closer control over a sprawling financial empire.
Links to other sites: Bloomberg, Reuters, Wall Street Journal
This work by genevalunch.com is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported.
News story, GenevaLunch, 26 November 2009.
Filed under: World news
Tags: Daimler, debt moratorium, Dubai, Dubai World, London Stock Exchange, Porsche, Sheikh Mohammed Bin Rashid al-Maktoum, stock markets plunge, United Arab Emirates
November 27th, 2009 at 6:48 pm
its scare to know that DUBAI is sinking. We never expected that from an
arabian country. It means, the ECONOMIC RECESSION is not over and
there is STILL TO COME in 2010. Do you think that 2010 will be worser
than 2009 ? I feel like that.
November 28th, 2009 at 9:26 pm
59 billion?! ….As W.C. Fields would have said, “Ha yesss, a mere bagatelle when it’s compared to the ‘zillions’ borrowed by Obama, that will allow the Chi-coms to foreclose on the United States at a date to be announced later”.
August 18th, 2011 at 6:42 pm
The GameChanger DNA…
GenevaLunch » Dubai financial meltdown fuels market concerns in Europe…