Abu Dhabi, United Arab Emirates --- October 6, 2009 --- Bank stock of HSBC for Business.  ( Delores Johnson / The National ) *** Local Caption ***  dj_06oct09_bank stock_004.jpg
More than $20bn in loans and bills seems large, but in the global bankers' world that is small change. HSBC has about $1.5bn at stake with Dubai World, but has total assets of $2,527bn.

Dubai World's banks will be more relaxed than bondholders



Dubai World climbs back in the ring on Monday. The eyeballing with bondholders over the repayment of the Nakheel sukuk last week gives way to a different kind of financial sparring, with more subtle factors at work, as talks begin in earnest on the billions of dollars of debt the company owes its banks. These are obligations of a different order altogether. With the US$4 billion (Dh14.69bn) sukuk repaid, Dubai World is left with many more billions of loans it must reschedule with more than 90 banks around the world. Getting all those institutions to agree will be like herding cats on a football pitch.

Dubai World is fortunate in two respects, however. First, the creditor banks are usually far less aggressive and intransigent than the bondholders, and far more willing to take a conciliatory stance for the sake of long-term business. Most of them are huge global institutions, and the sums at stake are minimal compared with their trillion-dollar balance sheets. The figures seem huge to us ordinary mortals - $22bn in bank loans and unpaid contractors bills - but in the global bankers' world that is small change. HSBC, one of the more exposed of the Dubai World lenders with perhaps $1.5bn at stake, has total global assets of $2,527bn.

The banks can, therefore, afford to take a more relaxed view than the hedge funds and arbitrageurs who ended up holding most of the sukuk, and who, in many cases, were personally invested. They stood to lose millions from their own wallets if the sukuk had not been repaid. I could not repeat - on grounds of taste and the laws of defamation - the threats I heard from New York hedge funds last week when it looked like they would not get repaid.

Nobody sheds tears for out-of-pocket bondholders, but similarly the big global banks will not cry over a few billion rolled over on to the coming year's balance sheets. The co-ordinating committee for the negotiations, the "cocom" in bankers' parlance, is dominated by the big lenders - RBS, Standard Chartered, Lloyds TSB and HSBC representing international banks, and Abu Dhabi Commercial Bank and Emirates NBD talking for the regionals. That there are no big US banks at the top table is surprising, but that also makes the process more manageable.

The other factor that may speed negotiations is that there is something of a template already in existence. Little noticed in the frenzied run-up to the Nakheel sukuk deadline was news that Global Investment House (GIH), the Kuwaiti financial institution which defaulted in late 2008, had agreed a financial restructuring with its creditors that allowed it to get on with its investment banking and asset management business.

The comparison with Dubai World is by no means a perfect match. The numbers are of a different magnitude - GIH defaulted over non-repayment of a $200 million facility, it had 54 banks to deal with, and in the end the final settlement involved some $2.1bn debt rescheduled. Small stuff compared with Dubai World. And there were few troublesome trade creditors complicating things by wanting to get their multi-billion bills paid immediately.

But the similarities are compelling too. It was the first ever default in the region, it was the first to have an Islamic element, and it was the first settled via a commercial process, that is, without recourse to government intervention. Dubai has made it clear that there will be no government support in the Dubai World situation. A team from HSBC put together the strategy for settlement. Neil Goldie-Scott, the head of the bank's restructuring unit, explains the basic principles: "From the outset, we determined three essential elements. We would continue to pay interest, we would promise to repay the principle in full, with no 'haircut', and we would treat all creditors equally."

With those basic tenets set early on, the bank manoeuvred around the rocks and shoals of financial restructuring. The volatility of the Kuwaiti political process, with regular stand-offs between the parliament and the ruler, sometimes presented challenges to the process (but this will not be a factor in Dubai). Early pressure from regional Islamic banks to be treated differently had also to be firmly resisted. In the end, after a year of tough negotiating, a settlement was agreed.

Monday's meeting in Dubai will probably kick off with dramatic confrontations between the company and its creditors, but much of this will be posturing. The real progress will be made in private and discreet talks in the months to come. If the lessons of GIH are learned, the process will be a lot less bruising. @Email:fkane@thenational.ae

THE BIO

Family: I have three siblings, one older brother (age 25) and two younger sisters, 20 and 13 

Favourite book: Asking for my favourite book has to be one of the hardest questions. However a current favourite would be Sidewalk by Mitchell Duneier

Favourite place to travel to: Any walkable city. I also love nature and wildlife 

What do you love eating or cooking: I’m constantly in the kitchen. Ever since I changed the way I eat I enjoy choosing and creating what goes into my body. However, nothing can top home cooked food from my parents. 

Favorite place to go in the UAE: A quiet beach.

PROFILE OF INVYGO

Started: 2018

Founders: Eslam Hussein and Pulkit Ganjoo

Based: Dubai

Sector: Transport

Size: 9 employees

Investment: $1,275,000

Investors: Class 5 Global, Equitrust, Gulf Islamic Investments, Kairos K50 and William Zeqiri

Jebel Ali Dragons 26 Bahrain 23

Dragons
Tries: Hayes, Richards, Cooper
Cons: Love
Pens: Love 3

Bahrain
Tries: Kenny, Crombie, Tantoh
Cons: Phillips
Pens: Phillips 2

PRIMERA LIGA FIXTURES

All times UAE (+4 GMT)

Saturday
Atletico Madrid v Sevilla (3pm)
Alaves v Real Madrid (6.15pm)
Malaga v Athletic Bilbao (8.30pm)
Girona v Barcelona (10.45pm)

Sunday
Espanyol v Deportivo la Coruna (2pm)
Getafe v Villarreal (6.15pm)
Eibar v Celta Vigo (8.30pm)
Las Palmas v Leganes (8.30pm)
Real Sociedad v Valencia (10.45pm)

Monday
Real Betis v Levante (11.pm)

COMPANY PROFILE

Company name: Revibe
Started: 2022
Founders: Hamza Iraqui and Abdessamad Ben Zakour
Based: UAE
Industry: Refurbished electronics
Funds raised so far: $10m
Investors: Flat6Labs, Resonance and various others

COMPANY PROFILE

Company name: Almouneer
Started: 2017
Founders: Dr Noha Khater and Rania Kadry
Based: Egypt
Number of staff: 120
Investment: Bootstrapped, with support from Insead and Egyptian government, seed round of
$3.6 million led by Global Ventures

Kill

Director: Nikhil Nagesh Bhat

Starring: Lakshya, Tanya Maniktala, Ashish Vidyarthi, Harsh Chhaya, Raghav Juyal

Rating: 4.5/5

STAR WARS JEDI: SURVIVOR

Developer: Respawn Entertainment
Publisher: Electronic Arts
Consoles: PC, Playstation 5, Xbox Series X and S
Rating: 4/5

In-demand jobs and monthly salaries
  • Technology expert in robotics and automation: Dh20,000 to Dh40,000 
  • Energy engineer: Dh25,000 to Dh30,000 
  • Production engineer: Dh30,000 to Dh40,000 
  • Data-driven supply chain management professional: Dh30,000 to Dh50,000 
  • HR leader: Dh40,000 to Dh60,000 
  • Engineering leader: Dh30,000 to Dh55,000 
  • Project manager: Dh55,000 to Dh65,000 
  • Senior reservoir engineer: Dh40,000 to Dh55,000 
  • Senior drilling engineer: Dh38,000 to Dh46,000 
  • Senior process engineer: Dh28,000 to Dh38,000 
  • Senior maintenance engineer: Dh22,000 to Dh34,000 
  • Field engineer: Dh6,500 to Dh7,500
  • Field supervisor: Dh9,000 to Dh12,000
  • Field operator: Dh5,000 to Dh7,000
Abu Dhabi GP schedule

Friday: First practice - 1pm; Second practice - 5pm

Saturday: Final practice - 2pm; Qualifying - 5pm

Sunday: Etihad Airways Abu Dhabi Grand Prix (55 laps) - 5.10pm

KEY DATES IN AMAZON'S HISTORY

July 5, 1994: Jeff Bezos founds Cadabra Inc, which would later be renamed to Amazon.com, because his lawyer misheard the name as 'cadaver'. In its earliest days, the bookstore operated out of a rented garage in Bellevue, Washington

July 16, 1995: Amazon formally opens as an online bookseller. Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought becomes the first item sold on Amazon

1997: Amazon goes public at $18 a share, which has grown about 1,000 per cent at present. Its highest closing price was $197.85 on June 27, 2024

1998: Amazon acquires IMDb, its first major acquisition. It also starts selling CDs and DVDs

2000: Amazon Marketplace opens, allowing people to sell items on the website

2002: Amazon forms what would become Amazon Web Services, opening the Amazon.com platform to all developers. The cloud unit would follow in 2006

2003: Amazon turns in an annual profit of $75 million, the first time it ended a year in the black

2005: Amazon Prime is introduced, its first-ever subscription service that offered US customers free two-day shipping for $79 a year

2006: Amazon Unbox is unveiled, the company's video service that would later morph into Amazon Instant Video and, ultimately, Amazon Video

2007: Amazon's first hardware product, the Kindle e-reader, is introduced; the Fire TV and Fire Phone would come in 2014. Grocery service Amazon Fresh is also started

2009: Amazon introduces Amazon Basics, its in-house label for a variety of products

2010: The foundations for Amazon Studios were laid. Its first original streaming content debuted in 2013

2011: The Amazon Appstore for Google's Android is launched. It is still unavailable on Apple's iOS

2014: The Amazon Echo is launched, a speaker that acts as a personal digital assistant powered by Alexa

2017: Amazon acquires Whole Foods for $13.7 billion, its biggest acquisition

2018: Amazon's market cap briefly crosses the $1 trillion mark, making it, at the time, only the third company to achieve that milestone

Sugary teas and iced coffees

The tax authority is yet to release a list of the taxed products, but it appears likely that sugary iced teas and cold coffees will be hit.

For instance, the non-fizzy drink AriZona Iced Tea contains 65 grams of sugar – about 16 teaspoons – per 680ml can. The average can costs about Dh6, which would rise to Dh9.

Cold coffee brands are likely to be hit too. Drinks such as Starbucks Bottled Mocha Frappuccino contain 31g of sugar in 270ml, while Nescafe Mocha in a can contains 15.6g of sugar in a 240ml can.


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