Updates on Dubai Debt
SECOND UPDATE: The International Monetary Fund will monitor the financial negotiations which started November 30 and will help stabilise Dubai's debt situation.
Surprising that no expert or journalist has mentioned that two of the multiple causes of Dubai's plight is that Arab countries are pegged to the much-devalued US$ and fluctuating oil/gas prices.
The Gulf Council considered changing from US$ to Euros, but did not after considerable pressure from the IMF. They have all lost a lot of money
.
UPDATE: Dubai World has lined up Deloitte and Rothschild to represent them next week in renegotiating loan contract payment terms with its lending banks.
KPMG will represent the lead banks including HSBC, Royal Bank of Scotland (RBS), Lloyd's Banking Group and Standard Chartered. They expect to form a steering committee of five to six banks to represent the lenders.
Since most of the exposed banks are British, the Financial Services Authority is requesting assurances that UK banks will not suffer huge losses.
The Central Bank of the UAE will monitor progress and has offered emergency aid to any bank needing it so that the nation's financial reputation is protected (which means Abu Dhabi will be involved).
Dubai World has steadfastly refused to be pressured into asset sales of their more valuable properties in the world's current low value climate to pay for the troubled Nakeel (latest word is that Nakeel will meet their December $3.5 billion bond payment).
UK banks have a poor case in some instances in that they made loans on properties which were government-related projects, but not guaranteed by the Dubai governement.
Again, the banks expect to be bailed out for their greed, failure of due diligence and poor management.
Legally, Sheikh Mohammed or the Dubai government cannot be forced to pay them. Nor can the National government.
Dubai and the UAE governments are proceeding in good faith to buy time and work out payment problems.
Susan's Views http://www.susansviews.com
Surprising that no expert or journalist has mentioned that two of the multiple causes of Dubai's plight is that Arab countries are pegged to the much-devalued US$ and fluctuating oil/gas prices.
The Gulf Council considered changing from US$ to Euros, but did not after considerable pressure from the IMF. They have all lost a lot of money
.
UPDATE: Dubai World has lined up Deloitte and Rothschild to represent them next week in renegotiating loan contract payment terms with its lending banks.
KPMG will represent the lead banks including HSBC, Royal Bank of Scotland (RBS), Lloyd's Banking Group and Standard Chartered. They expect to form a steering committee of five to six banks to represent the lenders.
Since most of the exposed banks are British, the Financial Services Authority is requesting assurances that UK banks will not suffer huge losses.
The Central Bank of the UAE will monitor progress and has offered emergency aid to any bank needing it so that the nation's financial reputation is protected (which means Abu Dhabi will be involved).
Dubai World has steadfastly refused to be pressured into asset sales of their more valuable properties in the world's current low value climate to pay for the troubled Nakeel (latest word is that Nakeel will meet their December $3.5 billion bond payment).
UK banks have a poor case in some instances in that they made loans on properties which were government-related projects, but not guaranteed by the Dubai governement.
Again, the banks expect to be bailed out for their greed, failure of due diligence and poor management.
Legally, Sheikh Mohammed or the Dubai government cannot be forced to pay them. Nor can the National government.
Dubai and the UAE governments are proceeding in good faith to buy time and work out payment problems.
Susan's Views http://www.susansviews.com
Awesome post! Interesting info to know.
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author, good work
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