Dubai 'will hit targets' over debt repayments

Davos: Dubai will meet its challenging schedule of debt repayments this year, the chief executive of the Investment Corporation of Dubai says in Davos.

The Dry Docks refinancing has been regarded as a test case for a series of debt repayments and restructurings totalling $14bn due this year. Jaime Puebla / The National

Dubai will meet its challenging schedule of debt repayments this year, one of the emirate's leading executives said at the World Economic Forum (WEF) in Davos.

"Without a doubt, Dubai will get through that programme, I have no concern about that," said Mohammed al Shaibani, the chief executive of the flagship holding company Investment Corporation of Dubai.

He was speaking on the sidelines of the main gathering at the Swiss town, where global power brokers and opinion formers gather every year. A high-profile team from the UAE is present at the WEF.

Mr al Shaibani said a deal with creditors of Dry Docks World, one of the indebted government-related entities facing a restructuring of some US$2.2 billion (Dh8.08bn) of debt, was "90 per cent there. We expect to close a deal very soon".

The Dry Docks refinancing has been regarded as a test case for a series of debt repayments and restructurings totalling $14bn due this year.

Mr al Shaibani also said Dubai would not need any assistance from entities in the capital to meet its repayments schedule. "We are very close to Abu Dhabi and very good friends, but we don't anticipate any financing requirements this year from that direction."

He said he did not believe Dubai's debt situation would be affected by the ongoing crisis in the euro zone. Some analysts have said tighter credit conditions in Europe would affect the attitude of creditors to Dubai companies seeking to renegotiate loan terms.

Speaking at the same venue, Sultan al Mansouri, the UAE Economics Minister, said the country's banks were more closely integrated into the global financial system than any other Gulf country. "We are all interconnected, so any kind of slowdown in Europe could have an effect, but let's be optimistic [Europeans] can solve it."

Mr al Mansouri added he believed European politicians were some way behind their US counterparts in getting to grips with the ongoing financial difficulties in the West. "I feel some frustration with the European politicians. The Germans recognise the need for teamwork in this, and they cannot do it alone."

The minister would not be drawn on whether the UAE would increase its commitment to the budget of the IMF, as recently requested.

"This issue, we are not part of it right now. We have to address issues in our region, our country," he told Bloomberg News.

Mr al Shaibani's comments come just after Dubai Holding Commercial Operations Group (DHCOG), a unit of the Dubai Holding conglomerate owned by Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, promised to repay a $500 million loan on time next week. DHCOG was also upgraded by the ratings agency Fitch from "negative" to "stable".

Other Dubai debts falling due this year have also been seen as problematic by some analysts, including a $2bn Islamic bond issued by Jebel Ali Free Zone Authority and a $1.25bn bond from the Dubai International Financial Centre.

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