A top official of the Dubai administration today said the six months is not enough to restructure the debts of the troubled Dubai World and has asserted that the government-owned conglomerate has enough assets to meet its obligations.
Dubai's finance chief Abdul Rahman al-Saleh told the Al Arabiya news channel that six months is not enough to restructure the indebted state-controlled Dubai World.
Saleh was also quoted as saying that the entity has enough assets to meet its debt obligations.
Late November, the Dubai government rattled the world markets with its announcement that it needs at least seek six months to repay $59-billion debts held by its primary investment company Dubai World and its real estate subsidiary Nakheel.
He also said a Dubai fund designed to help the state-linked firms has already given Nakheel $2.45 billion to meet its obligations. However, it is unclear when the money was disbursed to Nakheel. "The fund...Has given about 9 billion dirhams ($2.45 billion) to Nakheel to meet its obligations.
"The government is present to provide backing as an owner...But we would like to emphasise the distinction between guaranteeing and backing. The company has been receiving large backing from the government since its inception," the report said quoting Saleh.
Saleh did not rule out using the land bank of Nakheel, so long as local laws permitted, but said the issue can only be decided through talks between the firm and its lenders.
Reassuring investors that the government will be able to tap debt markets in the future, he said Dubai raised about $2 billion in an Islamic bond sale earlier this year as part of a wider $6.5 billion borrowing programme.
"We believe that the media exaggerated the situation ...Dubai is capable of meeting its sovereign debts," he told the channel when asked if the debt market would accommodate any borrowing requests by Dubai in the near-future.
Reportedly, Dubai World met its main creditors on Monday to discuss its request to delay repayment of $26 billion.
