Syria-Turkey Ties Lead To Profits

Recep Tayyip Erdogan, Turkey’s prime minister, is expected to sign a landmark trade deal with Syria in Damascus Wednesday.

Five years after the two countries signed a free trade agreement, trade volume has reached nearly $2bn a year. Officials are now aiming to double that figure.

Rula Amin reports on the growing presence of Turkish business in Syria.

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Dubai World Poised to Press For Loan Extensions

Dubai World is expected on Monday to ask key creditors for more time to pay off its loans, but leave them none the wiser concerning their prospects of being paid back in full.

Saddled with a $22bn debt and in need of restructuring, the Gulf Arab emirate’s flagship company is expected to formalise a request for a payment standstill at a meeting with some 90 creditors at Dubai’s World Trade Center complex.

Though important, the gathering will probably mark only an intermediate step in a lengthy process, with banking sources anticipating no detailed proposals on the terms of the potential standstill to be discussed.

Raj Madha, banking analyst at EFG Hermes said:”Providing clarity is clearly the number one priority. Obviously a standstill is not ideal. But a standstill with visibility of when payments will be received or the extent of these payments would be sufficient to call it a result.”

Dubai sent shockwaves through global markets on November 25 when it requested a standstill on $26bn of debts linked to Dubai World and its two property units Nakheel and Limitless.

A $10bn bond from neighbouring Abu Dhabi last week, the third to Dubai this year, helped it stave off default on a $4.1bn Islamic bond, or sukuk, from Nakheel.

According to the National, two top Dubai officials, on a confidence building mission to Britain and the United States in recent days, told financial leaders in London that repaying all bank loans in full was discussed as a medium term possibility.

Sheikh Ahmed bin Saeed al Maktoum, head of Dubai’s Supreme Fiscal Committee and the uncle of Dubai’s ruler, and Mohammed al Shaibani, deputy head of the committee, met officials in London last week.

A full repayment however, seems the most unlikely of available options and bankers expect Dubai World to propose the extension of maturities for at least a year or more while paying interest.

A steering committee of Dubai World’s largest lenders met the company on December 7. The committee consists of London listed Standard Chartered , HSBC , Lloyds and Royal Bank of Scotland, local lenders Emirates NBD and Abu Dhabi Commercial Bank.

Several bankers said that Lenders will take Dubai World’s requests back to their credit committees, which are expected to agree the standstill request early in the New Year.

Speculations continue to mount over which assets Dubai Inc, the network of government owned companies, is willing to sell to help pay off its debt obligations.

Dubai holding’s owner said that the luxury hotelier Jumeirah Group is not for sale. The group’s chairman said:”Jumeirah and Dubai Holding are part of each other and Jumeirah is not going anywhere.”

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du expands broadcast services through new partnership with Abu Dhabi Media Company

As part of a recent agreement signed with Abu Dhabi Media Company (ADMC), one of the fastest-growing, multi-platform media organisations in the Middle East, du is now providing world-class broadcast services to the UAE by up-linking several ADMC channels to the Nilesat satellite. Abu Dhabi Sports channel and National Geographic Abu Dhabi channel have been available since the summer of 2009, and Abu Dhabi Al Emarat channel was recently introduced in October. du’s Broadcast division and ADMC are currently discussing the future launch of additional Standard Definition (SD) and High Definition (HD) channels and are working closely to shape the next phase of their cooperative agreement.

“The new partnership with ADMC showcases du’s broadcast services expertise and is in-line with our corporate strategy for growth and development,” said Mohamed Al Shahi, Senior Director, Broadcasting, du. “We are delighted to partner with a leading firm like ADMC in bringing superior satellite television services to viewers across the UAE and the region, and we look forward to jointly launching additional channels in the near future – including HD offerings with next-generation sound and picture advancements.”

“We are committed to delivering world-class content, and our agreement with du enables us to broadcast a premier selection of channels to our large and growing viewership,” noted Ahmad Almenhali, Head of Transmission Operations, ADMC. “du shares ADMC’s passion for progress and innovation, and the new partnership will give both companies numerous advantages going forward. In the coming months, we will be discussing future opportunities to bring exciting new channels to air, leveraging du’s broadcast experience and ADMC’s pioneering approach to television content provision.”

© 2009 Mena Report (www.menareport.com)

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Dubai Projects to Go Ahead

DUBAI: As Dubai developers reassured the world their ambitious construction projects would go ahead, officials from the emirate were expected in New York to shore up confidence after a debt landslide threatened its top companies.

A government source said Sheikh Ahmed bin Saeed Al-Maktoum, chairman of Dubai’s Supreme Fiscal Committee, and Mohammed Al-Shaibani, chief executive of the Investment Corporation Dubai, were due to visit New York and Washington on Thursday and Friday, following a trip to London on Wednesday.

With global markets recovering from two years of financial crisis, Dubai delivered a sizeable aftershock on Nov. 25 when it asked for a standstill on $26 billion of debt linked to its flagship conglomerate Dubai World and its two main property units, Nakheel and Limitless.

This week Dubai’s wealthier neighbor and fellow member of the United Arab Emirates, Abu Dhabi, lent it $10 billion to meet Dubai World’s obligations until the end of April and stave off a bond default by Nakheel, developer of its palm-shaped islands.

Dubai’s government may also repay outstanding 2010 and 2011 Islamic bonds issued by Nakheel and provide further funds to Dubai World, the Financial Times said.

Abu Dhabi’s loan has alleviated immediate concerns, but banks remain uneasy about the billions of dollars they lent to fuel Dubai’s development boom on the assumption the emirate’s or the oil-rich federal government would back the debt.

“The headline risk remains, as Dubai World is still involved in a fluid process, so it is still key to proceed the dialogue with international investors,” said Ali Khan, managing director and head of brokerage at Arqaam Capital.

“We really need to see more practical implementations: new regulations should be adopted … decisions on legal issues and regulation should be cleared and up to international standards,” said Samer Al-Jaouni, General Manager of Middle East Financial Brokerage Co. Dubai’s developers said their projects were still going ahead.

Development on Nakheel’s The World islands, one of the assets it might look to sell to ease the debt crunch, is set to begin within months, a company spokeswoman said. “Thirty-three islands have been handed over to developers in the past year and since handover they have been working to obtain the necessary design and planning approvals, permits, and titles,” she said. “We anticipate that several developers will be ready to start construction on their islands in the coming months.”

Meanwhile, Dubai Properties Group, a unit of Dubai Holding, which is owned by the emirate’s ruler, said it was committed to completing its Tiger Woods golf course, a rare piece of good news for the world’s top golfer, who has lost a number of his commercial backers since being caught up in a sex scandal.

In the boom years, Dubai lured wealthy visitors and courted the media with celebrity-endorsed projects and developments such as The World, an man-made archipelago in the shape of a world map.

But whereas neighbors funded growth with proceeds from soaring oil prices, Dubai borrowed to invest through a network of state-linked conglomerates that offered limited transparency.

Dubai World’s troubles have raised fears among investors that other government-linked firms could also face problems.

Goldman Sachs said events in Dubai could delay the recovery of the UAE’s real estate sector, already hit hard by the global financial crisis, and put downward pressure on property prices and rentals.

Ref:http://www.arabnews.com/?page=6&section=0&article=129805&d=18&m=12&y=2009.

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Abu Dhabi gives $10bn to Dubai

Dubai’s government has said it has received $10bn from Abu Dhabi to help it repay an Islamic bond and fund the troubled property developer Dubai World.

The announcement on Monday came as Nakheel, the property development unit of the Dubai World investment fund, was due to settle the $4.1bn bond.

The move by Abu Dhabi follows weeks of uncertainty in Gulf stock markets prompted by Dubai World’s request on November 25 for more time to pay $26bn in debt.

Al Jazeera’s Dan Nolan, reporting from the Gulf Co-operation Council summit in Kuwait City, said that while it had been expected that Abu Dhabi would help its Emirati neighbour, the scale of the assistance was a surprise.

‘Nothing for Abu Dhabi’

“Nobody was expecting that this $4.1bn Islamic bond that was maturing today would actually be paid in full,” he said.

“Abu Dhabi said just a few days after this story broke that they would not be writing any blank cheques, and that they would be choosing when and where they wanted to assist.

“What has been announced so far has not involved any obligations on Dubai to Abu Dhabi. Abu Dhabi will get nothing from this, other than stabilising Dubai when it was needed.”

“Dubai World is really a model of overambitious building. When the financial tsunami hit the global markets, there was really no market for expensive apartments and these massive office buildings [in Dubai]”

Francis Lun, general manager of Fulbright Securities
Sheikh Ahmed bin Saaed al-Maktoum, the chairman of the Dubai Supreme Fiscal Committee, earlier said in a statement: “The government of Abu Dhabi has agreed to fund $10bn to the Dubai Financial Support Fund that will be used to satisfy a series of upcoming obligations on Dubai World.”

“As a first action for the new fund, the government of Dubai has authorised $4.1bn to be used to pay the sukuk [Islamic certificate] obligations that are due today.”

Christopher Davidson, a senior lecturer at Durham University’s school of government and international affairs and a writer on the UAE, said that “traditional politics” was behind the agreement between Adu Dhabi and Dubai.

“Some kind of negotiation or an agreement was in place, but of course it took place behind palace doors,” he said.

“The general public and the investor community will never really understand what happened, but as far as they are concerned, the UAE is now acting as one.”

Dubai’s stock market opened up 10.10 per cent on Monday, after news of Abu Dhabi’s grant was announced. Abu Dhabi’s market was trading about seven per cent higher.

The yen fell sharply against other currencies on the news, while the US dollar increased to 88.90 yen and the euro also jumped to 130.43 yen.

Hong Kong’s Hang Seng index rose in the last minutes of morning trade to finish in positive territory, while other markets across Asia also received a boost.

“We are here today to reassure investors, financial and trade creditors, employees, and our citizens that our government will act at all times in accordance with market principles and internationally accepted business practices,” al-Maktoum said in the statement.

“Dubai is, and will continue to be, a strong and vibrant global financial centre. Our best days are yet to come.”

‘Overambitious building’

But Francis Lun, general manager of Fulbright Securities, told Al Jazeera that Dubai had to re-examine its projects in order to make them viable.

“Dubai World is really a model of overambitious building. When the financial tsunami hit the global markets, there was really no market for expensive apartments and these massive office buildings [in Dubai],” he said from Hong Kong.

Dubai has struggled to complete some of its building projects amid the financial crisis [AFP]
“Who will live there, who will do business there? The problem is that maybe they will have to scale down their projects massively. I think it will take years, if not decades, for the buildings to be completed and fully occupied.”

Any excess funds from Abu Dhabi’s grant would help cover Dubai World’s obligations up until the end of April 2010, the statement said.

Dubai has announced a bankruptcy law that can be invoked if Dubai World and creditors fail to reach an agreement on debt maturing in the future.

“Dubai will announce a comprehensive reorganisation law, a framework that is based upon internationally accepted standards for transparency and creditor protection,” al-Maktoum said in the statement.

“This law will be available should Dubai World and its subsidiaries be unable to achieve an acceptable restructuring of its remaining obligations.”

The assistance provided to Dubai by Abu Dhabi, the largest member of the United Arab Emirates federation, is an attempt to stabilise regional markets and reassure potential investors that the UAE as a whole is on a sound financial footing, Al Jazeera’s Nolan said.

“Since this news [of Dubai World’s defaults] first broke a few weeks ago, Abu Dhabi’s stock markets have been hammered just as badly as Dubai’s.

“All of the Gulf nations have been affected. At the Gulf Co-operation Council summit in Kuwait there will be some happy faces, because they have a vested interest in Dubai – not only in terms of their own stock markets, but also because of the future financing of their own projects that are in the pipeline.”

References: http://english.aljazeera.net/news/middleeast/2009/12/2009121454243401178.html

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