Monday, November 30, 2009

Dubai to Dubai World Creditors: Drop Dead

The Dubai government disclaimed responsibility for the debts of its Dubai World conglomerate on Monday, crushing earlier assumptions by creditors that the Arab emirate would guarantee its liabilities, according to Reuters.

"Creditors need to take part of the responsibility for their decision to lend to the companies," said Abdulrahman al-Saleh, director general of Dubai's department of finance. "They think Dubai World is part of the government, which is not correct."

"The government is the owner of the company, but since its foundation it was established that the company is not guaranteed by the government," Saleh explained on Dubai Television.
"It deals with all parties on this basis and it borrows based on ... its projects and not the guarantee of the government," he said.

"The restructuring is a wise decision that is in the interest of all parties in the long term but might bother creditors in the short term," he declared.

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