Dubai Bankrupt?!?!

[Mephistopheles]

I never realized the situation was as bad as it says in the Bloomberg report below.
Bloomberg.com: Worldwide (http://www.bloomberg.com/apps/news?pid=20601087&sid=a4sAgqSD_LIA&refer=worldwide)
Thanks to the greedy CEOs & the like for really :mad: the world. I just can't believe these guys are still not in jail, but on the contrary they are all collecting their big fat bonuses.
It's all a conspiracy.

[puff m'call]

Here's a good one for the news papers

50% of Emirates Airline is up for sale to Abu Dhabi because Sheik Mo is broke as is Dubai.

True or not true but I heard it today!

[Saltaire]

Small potatoes compared to the US of A, Abu Dhabi could cut a deal tomorrow and save any concerning debt. The US is seriously bankrupt. Looks like they are going to bail out the car markers, they make lousy cars plain and simple. Let them go chapter 11 and change the foundation and re-structure.

[modesch]

Mephistopheles - You are right but without western knowledge they would be still sitting in the sand and even don t know that they have oil below them !

I never so soo greedy cultures in my live and i am proud to be not one of them !

I was in the sandpit but left already and laughing everyday !

Will come back when it is free of .......bs.

Sorrry for beeing emotional but they will :mad: up this region by themself.

[schismatic]

Any truth to the rumours that Abu Dhabi wants 50% in Emirates to bail Dubai out of the mess?

Maybe this is the logical point for an Emirates/Etihad merger. And thats likely to have consolidation. Between them they have a lot of aircraft and orders.

This playground was always too small for 2 big players so perhaps this is the solution in a much poorer world.

Lets hope any consolidation does not mean job losses.

Fly safe - Keep your head down and lets see what it all looks like when they sound the "all clear"

[Sal-e]

I don't think the 'all clear' wil be happening any time soon. But a merger is logical. On an important note, I wonder what the effect would be if the US economy totally collapses. What would happen to the industry here? Will orders be cancelled? How will this affect our lives since most of the GCC currencies are pegged to the USD?

[Panama Jack]

Sal-e,

If the US Economy were to totally collapse, the fine points of what would happen to the industry here would be rather trivial. You and I might be back in our impoverished little countries, relearning the ancient and forgotten arts of subsidence fishing and farming, while keeping some weapons to defend our little plot of earth from marauding hordes (think of the Somali pirates on the global scale). Then again, some of us might join them. :ouch:

[baob2oba]

Many many rumours in the pipe !

EK was, not such a long time ago, interested in starting an IPO, and I guess they had to retract after evaluating the threat of big neighbour Abu Dhabi. They might get back to this option and let the fat assets father merge EK & EY. Time to swallow the pride maybe!

Dubai is a trade and merging financial city that wasn't afraid of taking huge risks during the last decade. As the Ruler says, it's always " full throttle ", it is maybe still time to learn de-rated thrust and cool down, particulary in banking/finance and real estate.
Now the oil is under 50$, will EK save Dubai?...

Regarding the UAE, no worries for now... Father Abu Dhabi holds probably the biggest sovereign funds on earth, some solid oil reserves and a few contacts in the region, but for sure, some "adjustements"/restructurations are on their way.

A warning to this system, not to collapse now, but we all know it will crash.

[fractional]

Maybe this is the logical point for an Emirates/Etihad merger.I believe I said this before and not a long time ago. The JXB would be the perfect home for an Emirati-Etihad Air(ways or lines). I don't feel threatened.

[icarus sun]

I think that AD will want 51% or more of ek.Probably HQ move to auh,plus large 51% in dxb property companies/banks.

[Trader]

The underlying premis seems to be that Abu Dhabi has all the leverage in this situation. I don't think it is that clear since Abu Dhabi has every reason to see Dubai continue to be viable - a collapse in Dubai, besides being an embarrasment, would bring cause huge difficulties in Abu Dhabi as well. In fact, it would shake the entire Arab world (oil or not).

So, my guess would be that both sides are treading carefully because ----its in both their interests to do so.

[Rule3]

Please enlighten us as to why Abu Dhabi needs Dubai.:confused:

[Trader]

Because a loss of confidence in Dubai (Middle East in general) means a HUGE flight of capital from Abu Dhabi as well. The markets and economies here rely on foreign money now as much as any other country. The stock market declines here have been, in large part, due to the cashing out of foreign investors. They opened the markets to foreigners for that precise reason - they had moved to a point where there was no more growth without the foreign money.

It is just not in Abu Dhabi's interest to see Dubai collapse. Though, thats just my opinion.

[Craic Ore]

Totally agree Trader. It's all about confidence. If it goes away, it would take a long time to restore it. This place got built on it and a mass exodus of it and money would be a very scary proposition for this region.

[Wiley]

Emails doing the rounds in the Sandpit that it's a done deal - AUH had bought 40% of EK. However, it's not yet been confirmed and I must remind people to note the second last word in the title of this site.

[icarus sun]

Abu Dhabi does not need Dubai.Other way around. The auh government helps the other emirates out with cash. Not much outside investment in auh compared with dxb.Auh controls uae. Where are all the military tanks and airforce planes/helicopters based auh. The rest dxb included have only trainers at best all light equipment. The same with money auh was wise no debt.:ok:

[fourgolds]

Dubai is in trouble , rumours of the bulding industry stopping some of these "dream" projects. A general slow down as no one has spare capital to buy all these milllions of villas and apartments. Some developers are retrenching staff , Architects etc. If this continues on a big scale they will try to get much needed money from the Dubai public and not just Abu Dhabi , who knows VAT perhaps ?

Now you take this slow down , a world wide decrease in demand for air travell ( particularly on the high yield tickets) , a possible merger and I think times will be very interesting. Any thoughts on how it could affect EK/EY ?

Possible scenarios include a cancellation of aircraft orders ; retrenchments ( why do we need 2 heads of IFS , 2 heads of flight opps , 2 navigation and chart departments etc etc , 1 would suffice. I think the bubble could burst. Flight deck are not immune either. Based on this I think EK will resist a merger but may operate independantly of EY but just be partially owned by Abu Dhabi. I would hate to be one of the top echelon right now. If ever there was a chance for EK to drop the ball its now. If our illustrious leaders are spending all there energy on this then who is keeping there eye on the road ?

Then again the optomists will hit back hard at this ...... so INCOMING !!!!


ps , A pessimist is an optomist with experience.

[Jet II]

The same with money auh was wise no debt.:ok:

I think you will find that the reason AD has no debt is more to do with having the 5th largest Oil reserves in the world rather being 'wise'. ;)

[camelbreath]

I think you will find they also didnt waste billions turning the country into a giant theme park!

[Flyintin]

If Etihad and Emirates merge together, what will they call themselves.

Etimate, Emihad, @anyrate, who can say but the real question will be about crew integration. Can anyone guess on the possible choices for seniority list merger?

[Dropp the Pilot]

....could you sketch out the difference between being number two or number two thousand on the Emirates list?

I have had the luxury of observing that gradient for some time from a position of average perspicacity but I don't see any difference at all.

Stand at ease.

[nolimitholdem]

could you sketch out the difference between being number two or number two thousand on the Emirates list?

HAHAHAHAHAH! Brilliant!

Seriously, who thinks Dubai has much of a chance of survival beyond it's ability to over-promote itself anyway?! It isn't a city, just a collection of (partly -finished, poorly constructed, completely lacking in taste) buildings.

I would fully expect AUH to quietly scoop up the best parts.

[buba]

as somebody put it 'its like the biggest roundabout in the world'...haa haa

[Wiley]

but the real question will be about crew integrationOnly from our very self-interested perspective as pilots.

In my opinion, a far more 'real' question will be the integration of senior and middle management - and of course, the poor sods who do the hard yards for next to nothing in the far less glamorous jobs in both airlines.

I suspect that quite a few of them will not be needed, whereas people lke us (aircrew) will be excess to requirements only if they reduce the overall number of aeroplanes (sorry, 'airplanes' for our American cousins) in the combined fleet. I hasten to add that if the world economic situation continues on its present course, such a reduction is quite on the cards!

Let's all hope the AUH owners are willing to continue to operate at a loss in the short term so they'll have an up and running airline with excess capacity ready to exploit a burgeoning economic situation if and when one ever eventuates from the monetary bloodbath we're witnessing at the moment.

[Ahad Adump]

Economic crisis, empty aeroplanes??

WAHOOO!!!

We can get away on ID90's again.

[bnt]

I think you will find they also didnt waste billions turning the country into a giant theme park!
A bit of "cart before the horse" there, methinks. Dubai opened up to foreign investment and tourism because it doesn't have the oil reserves that e.g Abu Dhabi has. The money they spent was supposed to be investment that would recoup, handsomely, and with all those property amateurs from the UK and Ireland flying in, it was looking good for several years, but now... :hmm:

[rockamora]

ehhhh....u mean with British passport's...!

[777-200LR]

The callsign to Heathrow "Emihad 0000001"

[Bus429]

Come on, ladies and gents, do you really think EY and EK will merge?:confused:

[ZQN]

YES - I think it will happen soon.

[ShinjukuHustler]

I read somewhere recently that petroleum represents only 10% of DXB GDP. If this is true then the reduction in oil price may not affect them as much as let's say Iran/Saudi/Kuwait.

I'm not sure what % of it is for AUH however, as they have the bigger share of oil it might be more of an issue for them.

With all this talk of the 2 carriers merging, how does that fare for the latest one, FlyDubai?

[White Knight]

No merger..... A %age of the pie but no merger..

[Oblaaspop]

What complete and utter tripe!!

Even if there were a microscopic element of truth to this rumour, there are probably only around 5 people in this entire world that are privvy to this information. Now (and I'd put the rest of my career earnings on this), I am certain none of you doom merchants are one of these people??

If I am wrong, then I sincerely appologise 'your highness' and welcome to Pprune!:O

[nolimitholdem]

Step 1: Take medication, breathe deeply...that's it...

Step 2: Review title of forum again, focussing carefully on the fourth word in the title....

Oh, you mean this isn't the Gulf News?!?

:ugh:

[fractional]

Assuming AUH is actually financing EK and buying 40 or 50% of it, as a matter of respect of Arab solidarity, changes won't surface quickly to avoid DXB losing face. The changes will happen quietly, slowly and anarckily(?). It won't be easy to merge given the egos many of the top guys have in both camps.
Who will be the best Chairman, the best CEO, and the best VPs for the different areas? Who will prevail despite the muscling from AUH? How long will the whole thing take?
AUH and DXB will have the interest of flying the Emirates flag on the acft tails across the world as EK does at the moment, but other cosmetic changes will have to happen. Will JXB be a compromise as the HQ? Will the EY fuselage painting match the EK tail? Maybe!
Emirati-Etihad is not a bad name. It means United Emirates or Emirates United (not football). To avoid losing already secured world trade mark, Emirati is not too far from Emirates, it's an Arabic name and so is Etihad.
DXB and AUH airports may resize and still be used to serve both populations of AUH and DXB.
DXB's problems are not oil. It's liquidity. The money vanished from there and now they are short of cash. Investors are afraid. DXB should go back to the basics and concentrate their efforts on tourism because of the long and attractive sea coast, the desert and the mountain of the northern Emirates. They should also concentrate on their old trade mark of import/export and consequently cheap goods, and so attract tourism. They can continue advertising the name across the world, make still loads of money, but not filthy fortunes.

[Oblaaspop]

Thanks Nolimit.

I am well aware of the meaning of the R in Pprune (in fact I was aware of it when I joined the Forum around 5 years before you:}). However, there are some on here that post with such authority that their word is taken as gospel!

Around 5 hours ago, a mate at Etihad called me to TELL me that Abu Dhabi now owns 40% of EK!!! (Transpires that a mate of a mate of a mate read it on these very pages and passed the good news on:ugh:)

As I said, the merger/Abu Dhabi buyout is (for now at least) complete and utter tripe!

[fractional]

By Christopher Davidson. Christopher Davidson is a fellow of the Institute for Middle Eastern Studies at Durham University. He is the author of "Dubai: The Vulnerability of Success" and "The United Arab Emirates: A Study in Survival." This commentary first appeared at bitterlemons-international.org, an online newsletter. Here it is:
The credit crunch is moving around the world, claiming new scalps every week. Toxicity has spread from mature US financials to Europe and Britain and now it is the turn of the developing world. When the crunch hits a region, confidence rapidly falls, banks are jeopardized and credit dries up. The Western extractive states have been able to rescue their financial sectors by part-nationalizing banks and injecting liquidity. These are abilities that weaker states do not have.
Thus far, the Gulf states have remained fairly isolated from the impact of the crunch, partly due to the cushioning effect of surplus liquidity in their immediate neighborhood and the unspoken guarantee that massive sovereign wealth can be used to shore up any domestic collapse. Indeed, up until a few months ago the mood had been one of optimism, with many stakeholders in these economies contending that the region is impervious to the West's problems and that it is has successfully decoupled from any global recession. Rightly, it has been argued that even plummeting oil prices are not a problem, as the annualized returns from the various overseas investment funds in many cases exceed total oil revenues.
This view does not however appreciate the heterogeneity of Gulf states' economies. Certainly, Kuwait, Qatar and the UAE's Abu Dhabi are in very good shape: They have massive oil and gas exports and the largest sovereign wealth assets in the world. They also have relatively small national populations to distribute their wealth to. But in contrast, the more resource-scarce Gulf states, notably Bahrain, Oman and the UAE's Dubai, are now highly exposed to the credit crunch.
Since the 1990s, these economies have sought to diversify their economies away from hydrocarbon exports and heavy, energy-reliant industries, often by building up new sectors such as real estate and tourism. On paper this diversification has been successful: Other associated sectors such as construction have boomed, and in Dubai's case the non-oil share of the emirate's GDP has grown to over 90 percent. Moreover, the rapid economic liberalization required to kick-start these new sectors and the many lavish projects they have involved have won these countries international recognition and praise.
The year 2008 will, however, expose the fundamental flaws in these new post-oil economies. They have been built on a wave of global boom, relying on excess liquidity in their oil-rich neighbors and massive and uninterrupted foreign direct investment from further afield, often from the West. Indeed, they have never been put to the test as they have yet to really experience a true boom-bust cycle. The sectors that have been developed are particularly sensitive to a global downswing, indeed are prime examples of "peripheral economies" that have to respond in a dependent fashion to circumstances and retrenchment decision-making in the world's "core economies".
The biggest victim is likely to be Dubai, as real estate and tourism (and by extension construction) have been allowed to develop into the key pillars of the economy. No moratorium has been placed on the expansion of these sectors and the city state has grown wildly in the last few years, with growth rates that would normally be associated with an overheating economy and rampant, unrestrained speculation. Furthermore, few sustainable economic activities have been introduced and attempts to build a vibrant knowledge economy have remained stalled.
International financial observers and realtors have now begun to identify worrying trends: rapidly declining house prices, a stagnant resale market, the inability of off-plan property investors to keep up with their payment schedules, a marked decline in hotel occupancy rates and wage and hiring freezes in property companies. To make matters worse, they have highlighted the government's indebtedness: Dubai has borrowed heavily in recent years to finance all of the physical infrastructure needed to support and connect these new economic sectors. Thus, if the situation should deteriorate further - as it may well be doing given that large mortgage lenders have already had to be merged - there is a question mark as to whether the government can step in and come to the rescue.
But in some ways, the true merits or demerits of the Dubai model may never come to light, as the UAE brand is likely to be resurrected should Abu Dhabi intervene and bail out its close neighbor.
These are not my words, and they do not tell us implicitly of any take-overs, but one can read in between the lines that something will have to happen, if this is not happening already, behind the scenes. AUH will not do any deal(s) unless the move is advantageous for the Al Nahyan Household let alone the Emirate itself if referring to institutional terms. It won't be a temporary gig:=.
One thing is certain; they will hide it for as long as possible. Once in the open :yuk:, this will be vehemently denied by the WAM News Agency. I'll be here to see :rolleyes:.

[Oblaaspop]

Why's that Broken?

Is EK not one of the most profitable airlines on the planet? I assume the only reason Abu Dhabi would be remotely interested in EK is due to this very fact!!

That is why EK will do just fine without help from the South......

Not only that guys just look at it in simple terms. TC intimated at the begining of the year (when the IPO possibility was being put about) that EK had a market value of around $20bn. Assuming Abu Dhabi wanted 50% of it, they would only be putting $10bn into the Dubai coffers. Sounds like a lot to you and I, but really its a drop in the ocean for the Dish Dash brigade around here and would make bugger all difference to the liquidity issues in Dubai.

Even if, AD wanted 50% of EK as a 'good will' gesture for bailing out Dubai, it would make naff all difference to the way EK is run as a business, simply due to the fact that AD would want the same (successful) business model to keep bringing in the cash in the future, and there is no way they would SPOIL that model by merging it with a completely unprofitable one (EY).

[nolimitholdem]

Now now pop,

No need to start waving it around claiming it's bigger with regards to how long you've been on PPRune. Especially since "DOJ" on PPRune only reflects my current identity, not past ones... and if anything that only makes it seem a little more daft that you're getting all bent that someone would *gasp* post rumours on a rumour site...

Back on point, as much as I hope you are correct, your entire argument seems to be based on opposing speculation (which is what I consider the financial reputation of any Middle East company to be). You cannot on one hand say that none of us would ever know what truly is going on, but then so completely buy the financial reportings of EK as gospel. Bit of a logical disconnect.

As I said, hope you're right. But the only statement I truly agree with is that with these secret squirrels, we won't know until it's done.

[noflare]

One of the most profitable airlines on earth?...only if you believe the published figures!! :}

methinks a good external audit might reveal all is not as rosey as they would have us believe :ooh:

[Fart Master]

aaaaaaaaahhhhhhh........... the Cloak of Reality is settling heavily on the thin vaneer of Dubai's shallow shoulders.

I'm afraid that all I'm hearing is that 'you reap what you sow'.

[White Knight]

Noflare (hard landing!!!) EK is audited every year by PWC - I doubt very much that they'll let EK cook the books..

[Oblaaspop]

Noflare, SIA makes even more profit every year, but no-one ever seems to question that despite the fact both airlines essentially do the same thing and are about the same size!

Over to you!:}

[Marooned]

Sky News are in Dubai for the week with some special reports from the UAE.

Their correspondent Tim Marshal has already compared Abu Dhabi to Dubai as Washington is to New York... a bit of a stretch though he does mention Abu Dhabi's bailing out of Dubai as a result of the economic downturn.

Be interesting to see how the week progresses and how impartial they are in their reporting...

[trailblazer]

Noflare (hard landing!!!) EK is audited every year by PWC - I doubt very much that they'll let EK cook the books..

Of course they wouldn't, just like Arthur Andersen kept Enron honest:E

[fractional]

Auditors nowadays are "controllable" human beings...:mad:. They are not an independent org sent in by shareholders. Who pays the auditing job other than EK itself? Would they go against their pay-masters? Therefore, the numbers are as good as they make them look good ;). Let EK or EY or even other so protected institutions go public in the stock market...:8 and we'll see their real value.

[145qrh]

I seem to remember a note somewhere in the "Audited" accounts that state PWC audit the books that EK give them. I can only guess what that means.

And while we are on the subject how does BA manage to make more profit so far this year than EK. ??

[Fox3snapshot]

Alabbar said Dubai's debt obligations currently stand at $80 billion.

Dubai can and will meet all its debt obligations, which currently stand at $80 billion, the chairman of Emaar Properties said on Monday.

Mohamed Ali Alabbar, also a member of Dubai’s Executive Council, said Dubai’s sovereign debt obligations currently stood at $10 billion, while the total debt obligations of state-affiliate companies was $70 billion.

"Let me state categorically the government can and will meet all its obligations going forward," Alabbar said, speaking at a conference in Dubai.

"This city as a part of one strong nation will continue to grow and triumph."

So Dubai suddenly wants to be part of the nation again instead of setting out to distinguish themselves as primadonna's!!

I'm sorry does somebody have the figures for the Abu Dhabi sovereign fund standings, oh that's right only the biggest in the world :E

Ho hum....life in the Capital goes on :cool:

[Wiley]

The magic phrase in that press release isone strong nationIncredibly important "first venture" of a piece of news preparing the public for what will soon become a reality. That phrase, and others like it, will be carefully dropped into the future press releases over the next weeks to remind us all, but particulary Dubai's Emariti population, that it doesn't really matter who owns the family farm, Dubai or Abu Dhabi, as we "are all the same".

Judging by the way many of the local Dubai Emariti population reacted to Shk Mo's selling off Dubai's independent defence force to Abu Dhabi's control in return for the twin towers - how many years ago is that now? - (some really unhappy campers at the time, by it's all water under the bridge now), it's going to be a hard sell that will need to be skilfully sold over the next few months. (And with National Day just a week away, what better time of the year to start?)

I think we all wish we could share the optimism expressed by Oblaasop. However, I think the adage for the moment for any Dubai resident should probably be: "Hope for the best - but be prepared for the worst." If even half of what we're currently hearing turns out to be true, I suspect it's going to get ugly in places.

[camelbreath]

The biggest property bubble ever seen is about to burst, a nation built on greed/dirty money and a rulers folly is about to feel the credit crunch.
Lets hope the brotherhood come forward and keep it afloat otherwise it will be very messy :eek:

[Fox3snapshot]

Expect some answers by end week or early next....all will be revealed! :cool:

Anybody need a road map to the Ministry of Finance in Abu Dhabi...just follow the entourage of world leaders lining up at the Palace gates!! :E

[ekpilot]

Mohamed Ali Alabbar, Chairman of Dubai Financial Advisory Council and Chairman of Emaar Properties, laughed off rumours that Dubai may sell equity stakes in companies such as Emirates, Jumeirah or Nakheel, perhaps to the Government of Abu Dhabi, in order to fund sovereign debt obligations. "I have been receiving calls that Emirates has been sold and I laughed. It is a rumour and is absolutely not true. The government has not sold a thing and we will not be selling, as simple as that," Alabbar told reporters on the sidelines of DIFC Week.

http://www.business24-7.ae/articles/2008/11/pages/11252008_b93652285b294fd481fe12b8b6ca8b4d.aspx

Keep Discovering :ok:

[L1011]

Hubris is the best word to describe it all.

Shelley would be delighted:

`My name is Ozymandias, King of Kings:
Look on my works, ye mighty, and despair!'
Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare,
The lone and level sands stretch far away.


For those fortunate enough to have been spared English literature in their youth, the full text may be found here (http://www.online-literature.com/shelley_percy/672/)

[Three Wire]

1011

Profound, absolutely profound.

Three Wire

[waldorfin]

Oh dear, a bunch of pilots debating the most intricate of economic and financial issues that trained and qualified finance people have a hard time rendering.
keep to your pay grade people.http://www.pprune.org/forums/images/smilies2/eusa_naughty.gif

[Marooned]

blah blah... intricate of economic and financial issues that trained and qualified finance people have a hard time rendering.

Are these are the same people who only a few months ago failed to see the economic Tsunami coming when others, not so trained and qualified, did?

In the light of recent events I think we have as much a right to call ourselves financial experts as the born again 'well of course no one could see this one coming' ones claim to be.

[Cyberbird]

... weell Waldorfin - at least You still haven't learned the lection from the credit crunch - which might still be worsening -...:ugh:

"Oh dear, a bunch of pilots debating the most intricate of economic and financial issues that trained and qualified finance people have a hard time rendering"

the whole fcuk-up was ONLY caused by that "that trained and qualified finance people" who totally lost it, by selling CDO (Colleteral Damage Obligations) which have been in the end aslmost been more worth than the GDP of the biggist economy in the world . the USA;

so everybody who did trust his own instinct -rather than those shiny IPO brochures, off-plan-sale promises at the MOE etc. everybody who UNDERSTANDS that money in fact does NOT earn money by itsself (it never did!), and DISBELIEVED the the money-hazardeurs and therefore did NOT buy any of their obligations or funds, has been way smarter than that greedy money bunch at wall-street an other "card-house-players" who totally lost it:yuk:
Morgan Stanley warned his clients already on October 8th of the danger of too many traders and investment banks are merely playing “billionaire’s poker” nowadays - which is way off responsible inevesting & borrowing, as a bank is supposed to do - and / in the end/ caused the most seriuos downturn of the world-economy since the late 20ies - which ist most likely way from over yet!:sad:

And - please, don't tell me/ us ANYTHING about thöse "trained and qualified finance people" - 'cause they are exactly the opposite - as it turned out:
merely gamblers, who finally lost their game, don't really understand the effects of their doing - and the taxpayers have to pay the aftermath/ cleanup now, banks closing in dozends - the biggest bank of the world tumbling over theirt lost bets going in Billions of losses - like AIG, Fannie Mae & Citigroup in the US - basically BANKRUPT - livin' broken on US-treasury welfare now!

and if You take the "once so glorious" hedge-fund managers: just look how they've ben beaten hands-down by Porsche in their own game - losing Billions betting against the Volkswagen shares - ending in a short sqeeze,where they have to buy their borrowed shares back to zup to 500% higher prices - those muppets
Porsche breaks the hedge funds | Squeezy money | The Economist (http://www.economist.com/finance/displaystory.cfm?story_id=12523898)

- must be the same, who run our provident funds then :*

... and if you look at the naive propaganda-style gulf news etc. - you might believe less and less what those muppets are claiming, as the UAE stock-market tell's us a tatal different story: Dubai &the UAE are in a serious downward-spiral - whilst investors are running away and out of cash -drawing money out of the UAE into safer investments for the years to come- hence the fall in prices all over the board now /specially building companies like EMAAR and Nakheel are merely penny-stocks now, as the future outlook for them/ and the UAE/ is more than grim here!:sad:

[ferris]

You know you've been in the middle east too long when:

You have a chip on your shoulder about whether the emirate you live in is bigger/richer/better than the one next to you.....hey Foxy??

Oops, wrong thread, sorry. Now, lets get back to all the posts by people who think that the company they work for isnt just one of many of the owners that couldnt be bought/sold/traded/re-mortgaged like any other- especially when the wolves are at the door, or accountants who think they are "the smartest people in the room".

[DeweyCheatemAndHowe]

"trained and qualified finance people"


aren't those the same geniuses who predicted $200/barrel oil by the end of this year?

[Von Richtofen]

I don't get it. Where is the surpise.
You really believed that this scum city, this ammass of concrete and sand invented by the sick fantasy of a horse breeder and his bad counselor could be a success?
Ridicously built and priced real estate sold in malls, in cockpit and by filipinos whos previous job was bartendering never sound the bell in your head? Buy an apartment we'll give a you a plane?
In 30 to 40 years this place will be back to camels dates and pearls. That could have been a sustanaible solution from the beginning capable of attracting more tourism then nature raping projects and other idiotic ideas. But mixing arab proto semitic greed and oil cash with western briton planet spoling profit mentality ..what a mix!!
When I first come I start recycling.. like an idiot I was going to throw away accurately sorted waste in the recycling center.
Not anymore... dumping sewage on the beaches?
**** you... be the first to be submerged with the plastic bottle made with the black **** you pump out of sand.
Emihad will be based in Jebel Ali airport..that's the reason why the are building it. They knew it since November 2003 when Ethiad started ops.

sieg heil

Manfred

[concordino]

Mister Red Baron,

You are a Classic !!:)

[SIUYA]

Manfred.....

In 30 to 40 years this place will be back to camels dates and pearls.

Perhaps camels and dates, but I don't think there will be any pearls due to the upheaval to the marine ecology that's almost certainly taken place with the constuction of the ridiculous and ill-conceived man-made offshore monstrosities that now exist. :mad:

And it wouldn't surprise me if, as quoted by L1011, The lone and level sands stretch far away.... in the Gulf a lot sooner than the 30 to 40 years timeframe that you're suggesting.

[Union Jack]

Well, Dubai in general and Emirates in particular are receiving some nice free publicity right now on Sky News Active as the QE2 approaches Dubai, with frequent low level close-up shots of A340s flying overhead and, to cap it all, the main subtitle is - EMIRATES!:ok:

Jack

[MrMachfivepointfive]

UJ,

Last time I checked, Delta Charly was an A380.

Two rows of windows, right?

[nolimitholdem]

Was the E&E compartment on fire? Definitely a 380.

[fractional]

Syrian Aviator, I can understand your anger, but the real life is not just what you read on the local papers, see on local tv or hear on the local radio or what people generally say.
With the exception of few countries in the region where the wealth is institutional, convince yourself that the wealth will just "migrate" to the dismay of the general guy or girl on the street, road, city, village, etc.. Do not have illusions on that. It happened in the past when other Rulers were overthrown and It'll happen again here and elsewhere (even) outside this region. Look at Africa and other places.
Remember: the wealth is just with few if you compare it with the population numbers here.

[White Knight]

Syrian aviator - unlike fractional I actually don't understand your diatribe:=

I thought all of you buggers were trying to get green cards in the US of, what was it? Oh yes, xxxxing A...

[Firbolgs]

Hmmm... with Syrian working alongside us we can all sleep safely in the knowledge everything is under control...how can we possibly move forward with that kind of mentality in our midst :rolleyes:

[Union Jack]

Last time I checked, Delta Charly was an A380.

Two rows of windows, right?

Was the E&E compartment on fire? Definitely a 380.

Cheers, dears! You seem to be assuming that we were looking at the same aircraft - and last time I checked that wasn't how to spell "Charlie"!:uhoh:

Jack

[Oblaaspop]

Well, being on one of the sail boats next to the QEII with gin and tonic in hand, I can assure you Union Jack, that it was only the A380 in the air over the ship.

[Union Jack]

Happy to be corrected by the man on the spot, the Flying Dutchman, not to mention the other spotters!:ok:

Perhaps I was concentrating too much on the Queen of the Seas rather than the Queen of the Skies .....

Jack

[wizard1]

It was a 380 for sure with our esteemed leader flying it - did ya see me on a boat down there?! Back to the thread. I am increasingly worried by the unfolding economic events.

Al Habtour group fired 30% staff or thereabouts yesterday. Commercial and retail credit in Dubai non existant.(Direct from Financial Controler at major property developer) Not a crane moveing on Shk Z. And this is just the begining. Rents and resale (what resale) value dropping like a stone. We could be living (or not) in a very different world in 6 months.

How safe are we in EK??? Woolies went tits up yesterday (30000 staff out of work) Nothing and no one is sacred. Very scary times. Sure will be flying at econ and keeping my head down. Can they ditch some of these plane orders?Pax demand is sure to fall off a cliff shortly and we dont have no money to fly empty planes.

Comments please my bretheren

Excuse the spelling!

[5star]

wizard1,

I agree with the most and I'm getting a bit worried as well.

However EK is quite a safe place to work. It's not made from sand like most things over here and you must have noticed that they have a very good idea what they are doing (like squizing the last dh out of everyone).

How much of our traffic was transit again? I believe it is more than 80%. So people will fly again, no doubt.

We will feel it, for sure (they might push our inflight rest further back in Y ) and there will be a big slowdown but as always they will get the most out of it and I bet they are even kicking Boeing to get compensations for the T7 delays as we speak. In the mean time upgrading will peake to >5 years and after this is over they will stuff FO's with a couple of hundreds more DECs...

Now back to the topic. DXB bankrupt: You must have been in a coma NOT to have this seen coming.
With great amusement I see all these distress sales ads popping up in the GN...
keep discovering....

[Mustapha Rex]

Since Newscorp is in the ****e, no doubt Sky will show anything as newsworthy, like it has always done in the past anyway with their sensational war mongering terminologies of ethnicities and religions.

Emirates takes advantage of any possibility to show itself next to an icon such as the QE 2 and Sky would do anything to try and recover from its loss of face over the many debacles it has suffered.

Seeing the majority of poms now live in an absurd world of Union jacks still flying high (when in fact they ceased flying long ago) let one thing remind everyone that it now them who need Arab money after years of slander.

Interesting times to come indeed, would that mean that if they did lend the money, Abu Dhabi would take control of the UK?

I doubt they are capable of anything close to it since they can't even manage their own airline, let alone their city.

We are heading for the unknown, a major crach and no credible political systems or leaders to indicate otherwise.

[Firbolgs]

Mustapha what on earth are you talking about?? :confused:

[fractional]

We are heading for the unknown, a major crach and no credible political systems or leaders to indicate otherwise.
6 days ago an Iraqi minister, Abdel Qader Jassem Mohammed al-Obeidi, said this:
"Coalition forces are currently protecting the Gulf, and our navy will not receive its first ships until April 2009," and continued by saying :..."withdrawing precipitously, our gulf will become like the Gulf of Aden, where there have been 95 acts of piracy,"
AFP in the same article added:Obeidi was addressing journalists on his support for the controversial military pact that would allow US troops to remain in Iraq until the end of 2011, a deal now being considered by the Iraqi parliament.
The minister did not enlarge on his remarks or explain how the Gulf would become prey to pirates when one of its littoral states, Bahrain, is home to the US Navy's Fifth Fleet.
The Gulf, which supplies the bulk of world oil imports, is also bordered by Kuwait, Saudi Arabia, Qatar, the United Arab Emirates, Oman and Iran, all of whose navies patrol the waterway.
I don't think the trend here in teh Gulf will be so bad, but the oil money doesn't last forever and these economies need many other reliable sources to survive this crisis.

[Marooned]

BBC:

Dubai's stock market has fallen 5% to the lowest in four years, despite the emirate's efforts to assure investors that it can meet debt obligations.

The head of Dubai's economic taskforce, Mohammed al-Abbar, said the government owed $10bn (£6.6bn), while state-affiliated firms were $70bn in debt.

However, he said both the government and state companies had assets worth much more than their debts.

Dubai's government recently bailed out two lenders hit by the credit crisis.
"We are rationalising our expenditure and consolidating our activities", said Mohammed al-Abbar.

Emaar, the state-controlled property firm of which Mohammed al-Abbar is also chairman, was one of the biggest losers on Monday, dropping another 9% to its lowest level since being listed eight years ago.

The same guy of the economic task force is chairman of Emaar! Now we can really be assured things will be ok.

And these assets they mentioned are valued by whom? Themselves in a hyper inflated, speculation fueled property boom which is just going bust.

[145qrh]

I would love to see exactly what these "assets" actually are.:E

I can say I have umpty squillion dollars worth of assets too...does it mean they are real, or if they are can I realise the book value for them...:=

[nolimitholdem]

Interesting article. Perhaps there is more to the rumour than "pure and utter tripe"?

Abu Dhabi wants stake in Emirates for bailout cash (http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article5258243.ece)

[145qrh]

Just had a look at "The Rumor Buster".


Love the talking horses answer..Long on words, short on denial.

He should be a politician.:D

[noflare]

If things are so dire in DXB then why has one of EK whiz kid advisors has not told them to halt the flydubai low cost airline?:confused:
The set up costs must be massive and is it really needed at the moment?

If EY does take a large stake in EK I cant imagine they want it.

[Bypass ratio]

I look forward to moving to Abu Dhabi. Dubai's infrastructure is diabolical to say the least.

[Flying Spag Monster]

Perhaps we should be just as concerned about Sheikh Mo.... has any one seen him lately???

[EGGW]

Yeah, he was in the Happy Times yesterday. Unfortunately lending condolences to the son of Mattar Al Tayer, a 19 year old, who got frazzled in a high speed crash on SZR, last Thursday in the rain.

EGGW

[SOPS]

AFP: Dubai property giant sacks 500 as finance crisis bites (http://www.google.com/hostednews/afp/article/ALeqM5hOCCoDh29StkBuYXShb7JpmKSNFA)

This does not look good

[fractional]

Let's look at the future alignment of the UAE (pax) Airlines if the woes continue in Dubai and spread to Abu Dhabi. This is just a thought, not even a rumour.
- the unity government will go for an Emirati-Etihad, the International Carrier of the UAE where the top notch EK/EY will form the top management of the carrier;
- Continue with the project FlyDubai, as of the UAE National Carriers of the UAE by copying Air Arabia's project to fly the low incomers in and out of the Emirate. Given the crisis and the AUH muscling, some top EK execs will move to the LLC;
- Keep Air Arabia flying as Sharjah will continue to do so anyway. AA will cover the Northern Emirates since the name doesn't ad just the Emirate itself;
- Create a LCC carrier for Abu Dhabi to complement the LCC services of the other 2 major Emirates and transfer some of the other EK top execs to the new LLC in AUH;
Abu Dhabi may choose their own name brand for their own LCC, to give identity to Abu Dhabi after giving away the Etihad brand to a united International Airline of the UAE :8. And we will all live happier thereafter :mad:.
We better take it easy :cool: here, before going :{. Tough times ahead despite rents going down.

[concordino]

Before anything happens to Etihad and Emirates, the first victim to this recession will be Fly Dubai I think.

Possible scenarios are a launch delay or an outright cancellation of the project.( considering the delays Boeing is having).

Usualy low cost airlines prosper in tough times, but Fly Dubai's low cost model is not based on the same customer group as the European Low cost carriers.

[Ahad Adump]

Abu Dhabi wants stake in Emirates for bailout cash - Times Online (http://www.timesonline.co.uk/tol/business/industry_sectors/transport/article5258243.ece)





Emirates and Etihad merger rumours raise prospect of airline giant in Middle East - Times Online (http://www.timesonline.co.uk/tol/business/industry_sectors/transport/article5254612.ece)

[mmagadi]

How many of you know the pride of Dubai "Burj Al Arab" is owned by ADIA?

During the last years of Sh. Zayed Al Nahyan, he bailed out Dubai rulers from embrassment and bought it through ADIA.

[mmagadi]

Mohamed Al Abbar, the synonym of Dubai’s meteoritic rise during the past decade was sidelined by Rulers of Dubai for the past couple of year for unknown reasons and at last they were forced to have him brought to the forefront to defend Dubai’s financial position because he is the only Dubai official with some credibility. Dubai’s development was not backed by fundamentals but by greed. With the model implemented in Dubai the indirect taxing has sky-rocketed and I believe they have a special department for this purpose.

Residents of UAE were all affected with the Model pursued at Dubai which forced other Emirates follow suit. It created chaos and pains in housing, traffic, education, medical, and all other essential goods and service sectors. Rulers of Dubai should return to the basics and follow the foot-steps of Sh. Zayed and Sh. Rashed to achieve sustainable growth and stability, if not, whenever and wherever the development lost its human touch it sucks and indeed it is what is happening in Dubai at the moment.

[Dirigible]

Gulfnews: No merger with Etihad, Emirates says (http://archive.gulfnews.com/articles/08/12/01/10263905.html)

[Jetjock330]

Fractional,

"Etihad" means unity/united in arabic. The name is already there, and waiting!

[fractional]

The name is already there, and waiting! ... but the united emirates would give a sende of union, mutual understanding, rosy stuff :p; thus, the name I put forward where Emirati or Emarati doesn't differ too much from Emirates and Etihad or Itihad in itself is already an arabic name.

No merger with Etihad, Emirates saysTo save face, they will all deny a deal just like the purchase of Burj Al Arab and the removal the trade-mark of the same hotel from the Dubai registered car plates, both "played" by Abu Dhabi 4 years ago.

Regardless, I wish they clear up the waters the sooner, so I know what to do next :ok:.

[Che Guevara]

"Etihad" means unity/united in arabic.

Now there is an oxymoron for you.

Will 'Emerati' have that beautiful bird on the tail?...:eek:

[fractional]

Will 'Emerati' have that beautiful bird on the tail?... A mixture of the Etihad fuselage and the Emirates tail featuring the UAE flag stretching downwards to the rear will do fine.

[Jetjock330]

And an Audi to pick up the boys in Abu Dhabi will be fine too!!!:}

On second thoughts, it will be the other way round with EY buying into EK, no Audi's, no ERP, no.........!

[GMDS]

Well, the Dish-Dashs might be well advised to dump their infantile tribal drivel into the desert pooh-pond. As BA and QF apparently talk to merge, the ME airlines might be encircled and suffocated by a truly global airline.
Taken by their own game if they don't stay alert.......

[Fox3snapshot]

Unfortunately I don't think you have a very good understanding of the UAE, being the National Day (or Day-z as it turns out) it may be worth doing some historical research.

That money the 'UAE' has, ain't for all of the UAE! :\

A historically tribal region and once the Trucial Coast (also referred to as the Trucial States of Oman), combined with the ruling family of Sharjah being of the same Royal family from Qatar things get very complicated.

This account from the US library of congress will also enlighten as to the complications of the UAE (variations of spelling occur with respect to the Emirate names):

Oil is the major source of income for the federation, but it is found in a significant amount only in Abu Dhabi and to a lesser extent in Dubayy, Ras al Khaymah, and Sharjah. In principle, each emirate is required to contribute to the federation's budget (according to the provisional constitution, each state's natural resources and wealth are its own), but in practice only Abu Dhabi and, to a lesser degree, Dubayy have financed the federation. The resulting disagreement over budget contributions as well as over the integration of defense measures and forces led to the recurring renewal at five- year intervals of the 1971 provisional constitution, rather than the intended adoption of a permanent constitution.

And to complicate things a little further with adjacent Arab States including Saudi and Oman;

In 1955, the United Kingdom sided with Abu Dhabi in the latter's dispute with Saudi Arabia over the Buraimi Oasis and other territory to the south. A 1974 agreement between Abu Dhabi and Saudi Arabia would have settled the Abu Dhabi-Saudi border dispute; however, the agreement has yet to be ratified by the U.A.E. Government. The border with Oman also remains officially unsettled, but the two governments agreed to delineate the border in May 1999. Since that time, the U.A.E. has constructed a border fence along the entire length with both Oman and Saudi Arabia. The new fence and checkpoints will likely be finished by 2008-2009.

Here starteth the lesson....

:8

[Fox3snapshot]

Hey there SNAM :p love your work on the spelling of the places, depending on which map you pick up its a lottery as to which way they will spell them!

It is difficult to say where the whole thing is at because of the lack of transparency within the government and private sectors here and the real story is difficult to weed out of all the propaganda that is distributed. It goes without saying that the Abu Dhabi government is in a far better position and will hopefully use that position wisely, but as for Dubai...well who knows, but I don't think it is the rosiest picture :ooh:

Verci

I'm waiting for a knock on the door from that government mob with the three letter acronym and as they live just over the road they won't have far to come get me!! :E

Think I will make like an Ostrich and bury my head on the sand and pretend nothing's going on!

[Bin Landwirt]

Right on, Syrian Aviator. But don't forget, greed was finetuned in the UAE!!!! They sure learned quickly.....

[what_goes_up]

It seems that the deal has now gone through and Etihad has purchased an unknown stake in Emirates

source please??

[pool]

Wow, an outfit that excels in making losses supposedly buys one that makes profit. With what? Sounds like the subprime recipe!!

Good move, maybe this will lift them a bit, but I guess it's the sponsor that would buy into EK, not the clowns receiving his subsidies.

[fatbus]

The rumour was that the UAE Gov getting involved not Etihad.

[fractional]

The rumour was that the UAE Gov getting involved not EtihadIt's obvious that it will be the government. It'll be only at a very later stage that AUH will just say to DXB what to do next if they feel Etihad is not getting a fair deal. Watch the frequencies to Australia, Europe and States when they have to negotiate them again. It'll be more for AUH.
Do you guys remember what they did around 4 or 5 years ago among others? All they did in few words was to tell DXB to gently remove the Burj Al Arab silhouette from the DXB car number plates, and they had to.

[The Jolly Roger]

FOX3....I thought that with all that knowledge you'd know that an ostrich doesn't bury its head in the sand!!!!! :ouch:...

Anyways I've gotta start thinkin of what to do do with that 500Dhs payrise...;)

If Mr Reagan was still alive he might have something to say about the UAE and its "economy"...."I've talked to you on a number of occasions about the economic problems our nation faces, and I am prepared to tell you it's in a hell of a mess—we're not connected to the press room yet, are we?"

____________________________________________________________ ____
A satisfied customer. We should have him stuffed

[baob2oba]

Heard from Officials at AD Gov, don't ask for more:

30% of EKg "transfered" to AD Gov

Then 2 weeks later...

100% of EKg bought, 80% already financed.
Operations later transfered to Al Maktoum Intl Airport
Possible merge between EK & EY withing 2/3 years,
HQ in AD.

Reliability : 30% ( Meaning something is going on but learnt to be careful with officials )

Over.

[noflare]

I dont understand why an airline struggling for cash is even considering putting millions into a LOCO airline....surely Flydubai should be shelved along with some of DXB other follys?

As for an EY/EK merger, I doubt the local politics would allow that to happen!
Would be very messy for all concerned...
Isnt the UAE govt and Etihad the same thing:confused:

[White Knight]

Struggling for cash?? Get your head out of the sand ostrich:}

Whilst emaar, damac and nakheel may be struggling EK isn't....

[millerscourt]

WK Please explain how you know exactly what cash EK have at their disposal?

I am not saying you are wrong but just want to know where you get your inside information from;)

All that glisters is not gold

PS A Happy Christmas and New Year to you.:D

[kingpost]

Mr Mach .5

You talk utter crap. Consortium's of banks are lending money - check out the Qatar recent purchase, and EK make a stack money profit than they do. The loans are dependent on their credit rating, and the aircraft are then leased.

The reason EK started was because Gulf Air pulled out of Dubai, do you really think they're going to expose themselves again - it boils down to tribal ownership - time to relax & don't worry about it.

[Wiley]

Word from a non-EK source is that the stake AUH Inc has taken in EK is 40%.

[Flygulfair]

The reason EK started was because Gulf Air pulled out of Dubai, do you really think they're going to expose themselves again - it boils down to tribal ownership - time to relax & don't worry about it.

Sorry but your wrong, in no way was Gulf air ever associated with Dubai, Dubai started up emirates by leasing aircraft from PIA, and was started up to cause competition.

MrMachfivepointfive might be right, there is no telling what could happen to EK or if banks would like to borrow.

[SilveR5]

hey folks...this is the way things are going on here in the gulf...while it is bubbling under, they never become out of covers until the explosion happens and nobody can hide it anymore

I hope it's not that serious. After all you can never tell how bad the situation is or what consequences this will lead to. let's wait and see!:suspect:

[Gillegan]

Sorry but your wrong, in no way was Gulf air ever associated with Dubai, Dubai started up emirates by leasing aircraft from PIA, and was started up to cause competition.

I believe you need to go a little further back in your history. Gulf Air was originally owned by Bahrain, Qatar, The UAE and Oman (I don't believe I left anyone out). They provided service not only between points in the Gulf but from the major cities in Gulf (including Dubai) to various international destinations. In the early to mid 80's, as part of its effort to grow and diversify its economy, Dubai asked for increased services but was refused. It was from this that the idea for a Dubai based airline started. You are correct in saying that the original flights were started with leased aircraft from PIA.

[Lord Bracken]

I don't think anyone's suggested that Dubai owned Gulf Air, but GF did operate routes out of DXB and it was the refusal to expand these that led to the Dubai Govt setting up Emirates.

[Saltaire]

I like the old Warren Buffett adage in times like this, " you only know who's been swimming naked when the tide goes out", well the tide is out and let's see who has their birthday suit on !

There are some smart people that think in a year or two the gulf will bounce back very strong due to the impending inflation that the US gov't has started with printing so much money and added so much liquidity to the markets. If and when inflation comes back, it could be massive and the USD will drop sharply again, oil prices will rally, property prices will increase, and gold/silver will increase massively. Just a theory but it is very likely at some point in the not too distant future.

I'm sure many airlines around the world have been rocked by the low oil prices and mis-timed the fuel hedge. Must be tough to watch if you hedged at 80-100/ barrel. I would be very surprised to see any union between EK and EY. Things would have to implode rapidly for any real discussion, but never say never, it's a new chapter for the history books and world finance.

Interesting to see EY secure the sought after Tokyo slots....there certainly is power in the capital.....

[fractional]

GF did operate routes out of DXB and it was the refusal to expand these that led to the Dubai Govt setting up Emirates.This is correct Lord Bracken.
And the real power is shifting openly now as this was already the case behind the scenes before, but in a lesser degree. Signs of the times.

[Speedbrake Lever]

Gillegan and Fractional are correct

I was at the "meeting" Dxb wanted 2 direct LHR'S A WEEK

GF said no via Bah or DOH back then , hence Emirates started

as for this thread Dubai is bankrupt

IT IS

Watch out for Dubai Land , Fly Dubai and the finish of Jebel Ali Airport

going on holiers tomorrow

Got to get to Woolies before it re locates !!!!

Happy Xmas all

S.L.

[fractional]

A little bit off the topic but worth reading it:
Abu Dhabi can tap into wealth - The National Newspaper (http://www.thenational.ae/article/20081220/BUSINESS/682531112/1005)

[fractional]

Few days later and a another little piece of the puzzle emerges or perhaps not:rolleyes:: Emirates and Dnata now under ICD
Gulfnews: Emirates and Dnata now under ICD (http://www.gulfnews.com/business/Aviation/10271373.html)

And the article ends with:
"Emirates Group Decree Companies continue to be wholly owned by the government although now indirectly through the Investment Corporation of Dubai."

[Aiation Professiona]

By Robin Wigglesworth in Abu Dhabi and Simeon Kerr in,Dubai
Published: February 18 2010 02:00 | Last updated: February 18 2010 02:00

The International Monetary Fund yesterday urged Dubai to improve its handling of the debt restructuring of a major conglomerate and advised the emirate to reorganise the rest of its state-linked companies.

Dubai World, a troubled state-owned holding company, is restructuring $22bn of loans and bonds to local and international banks. But it has been criticised by bankers and investors for its lack of communication and transparency.

In a so-called Public Information Notice, the IMF "stressed the importance of a speedy, orderly, co-operative and predictable approach to debt restructuring . . . The process should seek to enhance transparency and information disclosure and ensure comparability of treatment among creditors."

Markets were alarmed this week by rumours that the conglomerate could impose severe "haircuts", or losses, on its creditors by repaying considerably less than the outstanding loans. Dubai World has denied the rumours, but Lord Mandelson, the UK business secretary, and a US treasury official recently urged the emirate to reach a fair deal with creditors.

Dubai World is still trying to secure a formal standstill agreement, but as the de facto standstill remains in place, the focus is on finalising a restructuring offer.

Abu Dhabi, the richest member of the United Arab Emirates, has provided funds to bail out Dubai. Previous statements suggested this financing was contingent on a formal standstill agreement. But one source said the funding would remain available even if this condition is not met.

Dubai World's decision last November to restructure its debts has caused bankers to speculate that other government-related entities (GREs) may follow suit. The emirate and its ruler, Sheikh Mohammed bin Rashid al-Maktoum, control two other conglomerates: Investment Corporation of Dubai (ICD) and Dubai Holding.

While ICD is considered the main repository of Dubai's "good assets" such as Emirates Airlines and Dubai Aluminium

, it has $28.3bn (€20.8bn, £18bn) of outstanding loans and bonds. Dubai Holding, the ruler's personal investment vehicle, has total debts of $15bn, according to Morgan Stanley.

The IMF emphasised that Dubai World's debt restructuring "should be accompanied by a vigorous effort to undertake an operational restructuring of GREs, including formulating exit strategies for non-viable corporations, a process that will likely take time".

Fitch Ratings yesterday downgraded Dubai Holding Commercial Operations Group, a part of Dubai Holding which includes hotel chain Jumeirah, to B+ from BB. Standard & Poor's withdrew its rating of DHCOG in late January, citing worries about its financial strength and complaining that "insufficient" information had been provided about the group.

Led by Dubai's travails, the overall economy of the UAE shrank by 0.7 per cent last year, the IMF estimated.

Dominique Strauss-Kahn, Page 9 More news and analysis: In depth news, comment and analysis of the Dubai financial crisis from the Financial Times (http://www.ft.com/dubai)

FT.com / UK - IMF urges more effort from emirate (http://www.ft.com/cms/s/0/a7e0e1c6-1c2c-11df-86cb-00144feab49a.html)