Dubai, what a part?
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Author: chigozie
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Dubai, what a part?
Few weeks ago, Dubai world in a bid to get herself ride of the debt that sent a shock wave around the world, proposed to her creditors the sum of 62 cents for every dollar. This meant that the creditors had to, apart from losing their capital to the tune of 100-62 = 38 cents for every dollar invested, had also to contend with the lost of the interest accruable to their investment. This proposal was later dropped for reasons that the creditors did not accept this option and for the fact that the interested parties, in their bid to push forward the Dubai idea, had to intervene. The debt was carried forward. This created an air of uncertainty but the appearance of Abu Dhabi on the scene soothed frayed nerves when she pumped some money into the cash strapped system. People were thinking the Abu Dhabi will dish out a blank check without any precondition, but much to pundit’s surprise, she gave out reluctantly a fixed sum and made it clear that the era of uncontrolled spending is gone as such, it will not be able to redeem all of Dubai’s debts. It also placed an inferred clause that it will only come into Dubai’s case based on the progress made towards control/management of the debt. To control spending, many projects were shelved, on-going ones halted and the authorities tried to put its house in order. For this, some heads rolled as people were arrested for corruption and mismanagement of funds. With the improvement of the global economic environment, a calmer environment was created. Things seem to have at last started to change. To keep a date with investors’ expectations, Dubai and Abu Dhabi yesterday (25/03/10) announced the input of about 18.0 billions of dollars into the system ( a far cry from the sum of about 100.0 billion dollars that it is owing) and at same time shifted the dates for the redemption of their debts to next 8years. This is a better option to the investors as compared to what was proposed before now. Every one heaved a sigh of relieved at least temporarily. But will this sigh of relieved last or is it a temporary measure aimed at cooling peoples temper?
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Messages In This Thread
Dubai, what a part? - by chigozie - 01-11-2010, 12:56 PM
RE: Dubai, what a part? - by chigozie - 02-11-2010, 06:10 PM
RE: Dubai, what a part? - by chigozie - 03-26-2010, 12:07 PM

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