Foreboding finds itself being outrun by intended victims

2012 sees Dubai Inc debts peak, but despite the Mayan-style foreboding, it's really not the end of the world, writes Sean Cronin.
Runners compete in the Dubai Marathon. Marathons are a natural habitat for Mamils. Duncan Chard for the National
Runners compete in the Dubai Marathon. Marathons are a natural habitat for Mamils. Duncan Chard for the National

People run for lots of reasons: to achieve fitness goals, to help others less fortunate or just to challenge themselves.

I run to escape noisy toddlers. The further I run, the quieter it gets. It helps that they can't keep up. Don't try to run before you can walk, I tell them.

Were it not for the escapism, I'd find running impossibly tedious. Lately, it has been about more than just fleeing the tiny tots.

At some point since the start of the year in which some Mayans predicted the world would end, I morphed into a Mamil (Middle Aged Man in Lycra).

A colleague claimed this denotes a compulsive obsessive disorder associated with mid-life crisis, which was unkind.

The real reason we Mamil moths are drawn to our spandex flame is the sense of foreboding that comes with the realisation of our own mortality.

Foreboding has had a great decade so far. Hollywood fed our need for apocalyptic fix with one end-of-the-world movie after another.

Later, we got a taste for economic Armageddon with the sub-prime crisis, which kept us going until the sovereign-debt crisis arrived like a long-awaited sequel.

A similar sense of metabolic foreboding has led me and my Mamil mates to the start lines of various competitions in this our final year.

First it was the Dubai Marathon, shuffling beneath the Burj Khalifa at dawn next to a man dressed as a rhino. Then came the Abu Dhabi Triathlon last weekend, which is the ultimate festival of Lycra and middle age. A wobbly Woodstock.

Foreboding has also got off to a great start in the Gulf this year, with the Strait of Hormuz brewing up nicely - Israelis, Iranians, nuclear reactors - you've got all the classic elements of a tip top Armageddon right there.

Closer still, 2012 is the year Dubai Inc debt repayments peak. This milestone has been greeted with a certain amount of Mayan apprehension by lenders owed more than US$13 billion (Dh47.75bn) coming due before the end of the world.

It came to mind at the start line of the Dubai Marathon, where most of the runners appeared to work for Dubai Holding - one of the emirate's three big government-backed conglomerates.

At first I thought I kept seeing the same person, wearing what looked like the Sunderland home kit with the name of his company across his chest. But then I noticed scores of these red-and-white striped Dubai Holding clones everywhere.

The race organiser's website search engine revealed there were more than 1,100 Dubai Holding folk pounding the road that day, more than 10 per cent of the entire field.

This seemed to me a stroke of corporate finance genius.

Who needs debt standstills and haircuts when you can get all your staff to go on a giant sponsored run? Charitable causes tend to hog the sponsored race space. Saving the rhinos is all very well, but what about the poor old corporate borrowers?

Dubai Holding and its indebted peers may not have to take such drastic action after all. Foreboding is on the back foot again - at least as far as Dubai's credit profile goes. Some thought 2012 would be a bigger test for the emirate than 2009, when Dubai World rocked global credit markets with its debt standstill. So far it hasn't shaped up like that.

The first positive signal came from Dubai Holding Commercial Operations Group on February 1, when it repaid its $500 million bond on time. Last week, Dubai World's ship repair unit said it was close to agreeing new terms on $2.2bn of upcoming debt obligations. The emirate's state-owned utility to repay about Dh1.2bn of debt ahead of schedule.

These positive signals arrive against a backdrop of improving business sentiment. Tourism and retail appear to be on the bounce, and that could help to replenish the coffers of some Dubai Government-owned entities. Assets will still have to be sold to balance the books, but the picture looks better than it did six months ago.

I still don't know whether those 1,100 Dubai Holding employees made it through the dreaded marathon wall. But the emirate seems to be running through its own wall of debt.

In the meantime, my next meeting of Mamils will be the Yas Triathlon in Abu Dhabi on April 13 - a Friday I believe. No bad omens there at least.

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Published: March 11, 2012 04:00 AM


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