Dubai7Stars

Dubai Holding seen at risk

2009-12-04T16:27:00.001+04:00

original source Zawya / Financial TimesThursday, Dec 03, 2009
Thursday, Dec 03, 2009

Thursday, Dec 03, 2009

With Dubai World cut adrift from implicit government support, there are concerns about potential defaults by other state-related entities. The name mentioned most by bankers and investors in the region is that of Dubai Holding, the personal investment vehicle of the ruler, Sheikh Mohammed bin Rashid al-Maktoum.

"Dubai's actions have introduced the risk that restructuring of other corporates could follow," Barclays Capital said in a report this week. "We would focus on those with weak fundamentals and upcoming maturities and we view Dubai Holding as being most at risk."

Dubai Holding's Commercial Operations Group's debt was yesterday downgraded to below investment grade by Standard & Poor's, the ratings agency, along with four other government related companies. The cost of insuring $10m (€6.7m, £6m) for five years against default ballooned to $1.1435m a year on Tuesday, making it the riskiest Dubai corporate bond according to the market.

A Dubai Holding spokesman yesterday said: "I am very doubtful that we will face any problems paying the debt. Dubai Holding is confident that it is on track with all payments."

Formed in 2004, its investment arms led the emirate's international buying spree to recycle funds generated by developing swaths of Dubai desert. The group leveraged profits to build debts of $10bn, with maturities in 2010 of $2bn, according to Barclays Capital.

Bankers say because of its connection to the ruler the conglomerate enjoys stronger political standing than Dubai World

It appears to have a stronger financial position. Analysts say it has a greater ability to service its debts thanks to a number of cash-generating businesses. It is believed to have received cash injections from the government in recent months. The company has never confirmed this.

Still, bankers say its investment arms, Dubai International Capital and Dubai Group could face more financial problems than its commercial wing, which spans hospitality, business parks and real estate. "Dubai Holding is not going to acknowledge problems right now. But there is a contagion effect in every Dubai entity , this is just the beginning," a senior banker said.

Dubai International Capital is believed to be looking to sell assets but has enough money ringfenced by the holding company to keep afloat its buy-out businesses in Europe and the Middle East, according to those familiar with the company. These people say its public equities portfolio, which includes stakes in EADS, Sony and ICICI Bank in India, may be sold. DIC is also winding down its emerging markets private equity unit, Middle East venture capital portfolio and interests in other private equity funds.

Dubai HoldingDubai 's commercial arm includes profitable businesses, such as flagship hotels company Jumeirah Group. The group has slimmed down faster than the troubled Dubai World conglomerate. DICand Dubai Group, for example, have merged their back-office operations and Dubai Holdings' developers have merged and been folded into Dubai 's leading developer, Emaar Properties, much to the alarm of minority shareholders who fear dilution and say they are being forced to bail out other companies.

The restructuring already under way at Dubai Holding is so deep that analysts are raising the possibility that, like Dubai World
, it could be broken up and its best businesses - notably Jumeirah - moved into other parts of Dubai Inc., such as Investment Corporation of Dubai , which is emerging as the emirate's "good bank" of assets.

Sheikh Mohammed al-Maktoum : "They do not understand anything."

2009-12-03T04:21:00.000+04:00

original source The Independent

Headline: Sheikh attacks investors for global fallout of Dubai debt

The ruler of Dubai hit out at international investors yesterday as his government's impecunious investment vehicle revealed plans to restructure $26bn of its debts.

Sheikh Mohammed al-Maktoum said: "They do not understand anything."

After days of uncertainty that sent shudders throughout the world's stock markets, Dubai World finally unveiled plans to address the liabilities of its two property ventures – Nakheel and Limitless – after midnight on Monday night.

The timing of Dubai's request for a debt standstill, on the eve of the four-day Eid holiday, drew criticism from financial communities across the globe.

But in his first public comments since the crisis broke, Sheikh Mohammed had harsh words for investors and remained bullish about Dubai's economy. "We are strong and persistent," he said. "It is the fruit-bearing tree that becomes the target of [stone] throwers."
more... The Independet

Nakheel and its parent will be a test case for Dubai

2009-12-03T04:06:00.001+04:00

original source Business Standard

Dubai World’s guarantee to bondholders could prove worthless. The emirate’s holding company, which is seeking a six-month standstill from creditors, pledged to repay a $3.5 billion Islamic bond issued by its now troubled property subsidiary Nakheel. Yet with local creditors effectively calling the shots, foreign lenders might find enforcing that guarantee impossible.

Nakheel has asked for trading in all three of its listed Islamic bonds to be suspended. Only the first, which was issued in 2006 and is due to mature December 14, was guaranteed by parent Dubai World. The liability on the subsequent two bonds, which have a total face value of $1.7 billion and mature in 2010 and 2011, appears to be limited to Nakheel itself.

The Dubai property developer’s 2008 accounts show $41.5 billion of assets and $17.5 billion of liabilities — a net asset value of $24 billion. But real estate prices in the emirate have fallen around 50 per cent in 2009.

That means Nakheel, which funded some of the emirate’s most outlandish projects, could easily now have a negative equity value of $5.5 billion.

The equity value at parent Dubai World, which had liabilities of $59 billion at the end of 2008, is also likely to be negative. Its portfolio of 10 companies looks mostly troubled. However, Dubai World does hold 77 per cent of publicly-listed ports operator DP World. That was worth $5.1 billion on November 25, just before Dubai World announced its intention to restructure.

Nakheel’s foreign creditors shouldn’t get excited about their recovery prospects.

To get a lawsuit against Dubai World off the ground, 75 per cent of Nakheel’s bondholders have to agree. But the majority of creditors are local banks, which are likely to accede to any request to roll over Nakheel’s debt — even if the capital structure remains unsustainable, according to one ratings analyst. And even if local lenders joined in, Dubai’s law might not support a claim that forced the sale of the assets of government-related entities.

Lawyers agree the restructuring of Nakheel and its parent will be a test case. That makes Dubai World’s guarantee look less than solid.

Dubai is down, but fighting for its place in the sun

2009-12-02T05:45:00.001+04:00

original source Wall Street Journal

Dubai 2 December 2009

Finally, a chink of light. Dubai World has belatedly provided some of details on its planned debt restructuring.

But for investors the situation still resembles a darkened room, where the outlines of the furniture are now visible but little else. And for Dubai itself, there is more than just the future of $26 billion of debt at stake. The emirate's credibility as a financial center and its ability to continue financing good businesses, such as ports operator DP World, will hinge on its handling of the crisis.

Tuesday brought some good news. The $26 billion of debt affected is less than the $60 billion feared last week. Even so, questions linger. The restructuring process will include Dubai World itself and property developers Nakheel World and Limitless World. Analysts at Barclays Capital have identified $8.5 billion of debt at Nakheel, $5.5 billion at Dubai World and $1.2 billion at Limitless. That still leaves $10 billion unaccounted for. It may be in bilateral bank loans where there is no public disclosure. But it still leaves creditors unsure of their position.

It is also encouraging that Dubai World intends to adopt a policy of regular communication, though again the process lacks detail. For example, it is unclear whether the six-month standstill requested from creditors is voluntary or enforced. Given the looming Nakheel maturity -- just two weeks away -- it will be a challenge to secure creditor agreement in advance. If some lenders reject a stand-still it could trigger another bout of uncertainty and bondholders are organizing themselves for battle: a group holding 25% of the Nakheel bonds has hired Ashurst as a legal adviser.

Dubai's strategy relies on ringfencing certain key businesses from the general restructuring -- possible because of the lack of cross guarantees in the Dubai World group. For example, Ports & Free Zone World, which includes port operator DP World and P&O Ferries, is now clearly excluded from the process. But the initial lack of clarity on this issue has already cost Dubai Inc. a swathe of ratings downgrades. Of Moody's six ratings on Dubai companies, four are now junk.

The history of debt restructurings suggests that investors will not be scared off Dubai forever. Russia, for example, returned as an oil-fuelled darling of international investors even after its sovereign default in 1998 and amid continuing corporate governance and transparency problems.

If Dubai handles the painful process sensibly, it will emerge chastened from the experience, but not necessarily a spent force. The infrastructure built during the bubble will not vanish. The emirate now has to prove its status as one of the most western-friendly places to do business in a region still attractive for its massive oil wealth. If it can do so, Dubai will be down, not out.

Write to Richard Barley at richard.barley@dowjones.com

Project Maritim Hotel Dubai Land - DUBAI 1000 Hotel Fund - Arrest Warrant against Georg Recker

2009-12-02T01:49:00.001+04:00

DUBAI 1000 Hotel Fund - Warrant of Arrest against Georg Recker

Based on research by German newspaper "Westfälischen Allgemeine", since a couple of weeks a warrant of arrest has been issued by Dortmund Court of Justice (Germany) against German Georg Recker (36), initiator of "Dubai 1000 Hotel Fund".

For Recker an international quest is conducted, assuming that he is staying since longer time now in Dubai. Recker is under suspect of embezzling from German investors an amount of approx. 25 Million Euros.
State Attorney Dr. Ina Holznagel from Dortmund Public Prosecution did reject on request any information since when the warrant is already issued. But she confirmed that prosecution against Gerog Recker is ongoing since early 2008.

Meanwhile prosecutors have been able to freeze five bank accounts in Germany with deposits in the amount of roughly 1Million Euros. A drip on hot stone with view to approx.
25 Million Euros collected by Recker from more than 900 investors.

Up till now, just 2 claimants took seizing action against these accounts: one investor and one former employee. "For us it will always remain indistinct, how lame especially German investors are acting if they face fraud and embezzlement with regards to their own moneys," says Martin Kraeter, Principal of KLP Group Emirates.

Law firm KWAG from Germany represents just 50 out of 900 investors with claims of approx. 1Million Euros. They try to seize blocked funds now, as long as there are remaining funds on the accounts.
All other investors seem to preferably follow Recker’s lawyer Mr. Eckehart Heberlein from Munich: Heberlein seriously states frequently that the investment object of the fund - a MARITIM Hotel in Dubai Land - will soon be built and that there is constant progress on the construction site . . .

Recker‘s "Group of Companies" in Hamm (Germany) already has been restructured in October 2009: New CEO of "Travel-Dubai AG" is now since 22.10.2009 Mr. Ben Neuendorf (45). He is seen as Recker’s right-hand - by this prosecution is also running against him.
Recker himself is not reachable, of course. Remaining employees in his „Enterprise Group“ back in Germany are advised not to give any kind of relevant information.
Source (in German language)

Happy Birthday Burj Al Arab - Global Icon marks its 10th year

2009-12-01T06:18:00.001+04:00

original source The National

The Burj al Arab hotel, identified the world over as the symbol of Dubai, is 10 years old today. As it celebrates its first decade in business, Leah Oatway looks at the history and significance of the stunning structure on its own manmade island off Jumeirah Beach

Dubai // They were asked to create an icon for the nation, a building to capture the imagination of the world and represent the hospitality, vision and history of the UAE.

Today that building, the Burj al Arab hotel, celebrates its 10 years in business
read the full story in The National

Website BurjAlArab Jumeirah

PS:
Personal Greetings to the Staff of the Majlis Al Bahar, Burj Al Arab Beach. From the beginning, the openening of the Burj Al Arab 1999 all our holidays in the past 10 years have been great - thanks to your excellent service.
Keep on in Quality - and enjoy this special Birthday

Dubai Crisis : This is why investors are nervous. It's not the lack of money

2009-12-01T04:01:00.001+04:00

original source Wall Street Journal

Dubai's troubles offer a warning of the perils of investing in places where leaders--whether of governments or companies--have limited accountability.

In fact, it raises questions about other investment destinations: China, for example.

One reason why markets continue to be jittery over last week's news of a standstill on property conglomerate Dubai World's debt is the lack of transparency surrounding it. That's a direct function of a closed political system that is not conducive to foreign investment.

The announcement of the restructuring has been handled abysmally. Even with Dubai World divulging long-awaited details Monday, information has been spotty and contradictory.

It's still not clear which creditors will be hit, and there are still big questions over how much of a guarantee oil-rich sister emirate Abu Dhabi is willing to give to back up Dubai's debt.

Investors have been left to speculate over political motives.

One theory holds that Abu Dhabi ruler Sheik Khalifa bin Zayed Al Nahyan is withholding his support--despite the financial risks of not doing so--because he's angered by his Dubai counterpart's close ties to Iran.

Alternatively, others say that the naturally more conservative Abu Dhabi is simply reluctant to stoke moral hazard by bailing out Dubai's risky property investments.

Either way, because they can't divine what's going on in either of these two billionaire monarchs' heads is the essence of investors' problems. In an information vacuum, many have imagined the worst and have felt compelled to sell their Dubai debt positions, which in turn creates problems for banks with exposures there and, by extension, for global stock and credit markets.

This all stems from the overarching political system in place.

In the absence of democratic institutions, the UAE's sheikhs are not required to explain themselves.

And as the majority owners of many of the biggest companies, they face no checks and balances from minority shareholders. Meanwhile, contract law is fraught with the uncertainty of a legal system that's low on judicial independence.

This is why investors are nervous. It's not the lack of money.

After all, Abu Dhabi, with a sovereign wealth fund worth anywhere from $300 billion to $900 billion, has plenty of that.

The bigger lesson in all this is that investors need to be doubly careful of investing in countries with closed political systems.

With the spectacular failure of U.S. financial markets last year, it has become fashionable to laud the top-down central planning of countries like China, which was able to more quickly put its giant fiscal stimulus to work this year.

But if and when China faces a crisis, investors will have a more difficult time interpreting the actions of government officials and of the managers of its state-run corporations than they would in more openly governed countries.

To be sure, the Chinese Communist Party functions with more consensus than monarchy like Dubai. And for now, China's capital controls make it nearly impossible for foreigners to make portfolio investments there.

Nonetheless, direct foreign investment in China is soaring, as is broader exposure to its boom via assets in neighboring countries. If nothing else, Dubai's crisis is a reminder that those investments carry political risks that are absent from more transparent markets.

—Michael Casey writes a regular column on fixed income markets for Dow Jones Newswires. Previously he was Newswires' Buenos Aires bureau chief and before that, assistant managing editor for the U.S. economy, Treasurys and foreign-exchange group in New York.

Write to Michael Casey at michael.j.casey@dowjones.com

Empty office space in Dubai totals 10 million sq ft

2009-12-01T03:12:00.001+04:00

original source Arabian Business Monday 30 November 2009

About 40 percent of Dubai’s office space is lying empty after the emirate’s construction boom outpaced demand, broker Knight Frank LLP has said.

Empty office space totals 10 million sq ft (929,030 sq m) in Dubai, the firm said in a note on Monday, reported by Bloomberg news agency.

The vacancy rate for office space in the UAE capital Abu Dhabi is six percent, the broker said.
read the full report

Debt Crisis Dubai World - Why is Dubai still causing concern ?

2009-12-01T00:51:00.001+04:00

original source Guardian UK

Why is Dubai still causing concern?

Yesterday was the first day investors were able to trade in many Middle East markets since news broke on Wednesday that Dubai World, one of the region's largest property companies, was unable to pay its debts. Many suspect the news was released before the holiday, Eid, to limit the global reaction; instead investors panicked even more due to a lack of information. Their worst fears were confirmed yesterday when the Dubai government finally issued a statement but refused to stand behind the company.

What about western markets?

European and US stockmarkets have calmed down since last week, but the episode has reignited fears that our financial system is not through the worst. British banks such as HSBC, Standard Chartered, RBS and Lloyds are most exposed, although they have told City regulators that their losses are manageable. Other countries with large international debts such as Greece, Ukraine and the UK have seen investors take fright, sparking fresh fears that the next phase of the crisis will move from companies to countries.

Has Dubai gone bust?

Technically, the crisis at Dubai World is a purely commercial matter, and should not count as a national or sovereign debt default. But the company is so intimately tied to the emirate and its ruling family that the government would have tried everything possible to protect it before resorting to this.

What help is Dubai getting from other Arab states?

Abu Dhabi, Dubai's larger neighbour, yesterday offered to provide emergency funding for local and foreign banks, but pointedly declined to provide specific guarantees to Dubai World. What support is offered is likely to come with strings attached.

Will the IMF need to get involved?

Rumours swirled over the weekend that the International Monetary Fund was preparing an emergency bailout. This was downplayed in Washington, but officials called on local central banks to intervene and said they were monitoring the situation carefully.

Has the crisis been overblown?

The recovery in international markets has led some market commentators to argue that the Dubai World default was an isolated incident. However, both western banks and local politicians have a strong incentive to underestimate the losses. Independent analysts who have studied Dubai's debt problem such as UBS and EFG-Hermes, a local investment bank, estimate it is much larger than the official $80bn – possibly rising to $120bn-$150bn.

Will it come closer to home?

Jitters over the creditworthiness of countries such as Greece could become self-fulfilling if they are unable to finance their debts using international investors. This would put enormous pressure on the eurozone, which may be forced to bail out weaker members or see the future of the single currency put in jeopardy. Countries outside the euro, such as the UK, may also see the cost of borrowing increase if the cost of insuring their debt continues to rise. But the more immediate worry is the exposure of British banks, which make up four of the six banks most heavily involved in Dubai World.

Dubai Stock Market Slumps Monday 30 November 2009

2009-12-01T00:46:00.001+04:00

Gambles Dubai with its financial reputation ?

2009-11-30T05:11:00.001+04:00

original source Zawya

When you start building a third island shaped like a palm tree, intending it to be as big and crowded as Manhattan, you are crying out for a sober voice to bark: "Stop!"

But when that island is just one atoll in an artificial archipelago that would reconfigure the Persian Gulf coast into a thicket of trees, a map of the world, a whirling galaxy, a scythe and a sun that looks like a spider, what you need is some corporate restructuring. That, we learnt on Wednesday, was exactly what holding company Dubai World, the parent of Dubai's chief coastal developer Nakheel, would get.

Last year, Robert Lee, one of Nakheel's executives, showed me a map of the future Dubai Waterfront as his company put the finishing touches on the more modest Palm Jumeirah, the skyscraper- and villa-crammed island that started the trend.
"That's crazy!" I said. "Bold," countered Mr Lee.
Bold is probably not the word that the number-crunchers at Deloitte are muttering as they pore over the company's books.

The Dubai government's decision to postpone repayments on $3.5bn in Dubai World debts - seen by investors as the litmus test of the emirate's creditworthiness - is the clearest sign yet of the dire state of its economy. Dubai's fanciful island reclamation, a doubtful investment in an era of rising sea levels, was just one of the gambits that ushered this tiny emirate into the world's consciousness.

Thankfully, many of these ideas wound up on the scrapheap. There is the cancelled Snowdome (although the city's indoor ski slope lives on), part of a gargantuan amusement district that was to be larger than the city of Orlando it intended to rival. Also scrubbed is the $11bn Arabian Canal, a 75km moat that would have ringed the city. Enough of these sorts of schemes were built to make Dubai and the United Arab Emirates the holder of the world's largest percapita environmental footprint.

Until Wednesday, investors were largely content to give Dubai the benefit of the doubt, given that ruler Sheikh Mohammed bin Rashid al-Maktoum had assured the world that his emirate was good for its debts.

In a region where a man's word already carries outsized weight, the blunt-spoken sheikh's charisma had been built on the credibility of his pronouncements. It must be painful indeed for him to be seen as backtracking.

Sheikh Mohammed, whose family has run the emirate with astonishing stability since 1833, faces an acute test of his leadership and the clearest threat yet to his dreams for the city.
The ambitious sheikh wants Dubai to become the financial centre for a quarter of the globe, the under-served and fast-growing markets between Singapore and Frankfurt.

Wednesday's announcement makes that goal less likely, damaging Dubai's reputation among the investors and financiers it has worked so assiduously to court. "Naturally they are not amused," says Eckart Woertz, chief economist at the Dubai-based Gulf Research Centre. "It will be a case of once bitten, twice shy should Dubai try to tap international markets again."

In the longer term, the news could make Dubai's rivals more attractive, persuading international companies to decamp to, say, Doha or Abu Dhabi. Unlike Dubai, those cities have sound, energy-based economies.
But for now they do not offer the same level of western lifestyle, nor can they match Dubai's services in shipping, logistics, banking and air travel.

The emirate's inability to repay also casts a shadow on the Maktoum family's vital relations with its cousins who rule Abu Dhabi, the al-Nahyans, who seem to be letting their poorer kin sweat it out in public.
One wondered what price Abu Dhabi might demand for a full bail-out.

One plausible option was a tighter union among the seven UAE states, with maverick Dubai forced to trim its embarrassing ties with Iran and Israel. Dubai might also have been asked to merge its independent customs service into the federal bureaucracy.

Sheikh Mohammed may be calculating that Dubai's foreign policy freedom is more valuable than its financial reputation.

There is logic in this.

The bankers in London and New York have been important in nurturing Dubai's growth.

But the emirate's ties with the region - Karachi, Mumbai, Riyadh and Tehran - are those that will make or break this city.

The writer is the author of City of Gold: Dubai and the Dream of Capitalism
By Jim Krane

Dubai debt tops global headlines

2009-11-30T04:51:00.001+04:00

Dubai property market set to see further price falls
Arabian Business 29 November 2009

Dubai's property market is likely to face further price falls and increased concerns over the availability of finance after the emirate said it would delay debt payment issued by two of its flagship firms, analysts said.
... read the full article

Dubai World refuses assets sale - paper

Dubai World has refused to offload assets at fire-sale prices to repay obligations, forcing it to seek a debt standstill, a newspaper report on Sunday quoted an unnamed source at the government-controlled firm as saying. read the full article..

The National

Central Bank to back country`s lenders

The UAE Central Bank has pledged support for lenders in the UAE and made emergency funds available to avert any liquidity shortage that might occur as a result of the proposed restructuring of Dubai World.

Banks in Abu Dhabi and Dubai are expected to disclose their exposure to Dubai World’s estimated US$24.27 billion (Dh89.14bn) bonds and bank debt amid a global search for creditors. read the full story

Reuters

UAE moves to counter Dubai fallout but markets wary

DUBAI (Reuters) - The United Arab Emirates offered banks emergency support on Sunday, the first steps to ease fears that a looming debt default by two of Dubai's flagship firms could derail the global economic recovery.

But the move to inject liquidity into Dubai's banks by the central bank of the Gulf Arab state, together with promises by neighboring city-state Abu Dhabi to provide selective support to Dubai companies was seen as by analysts as the bare minimum.

Dubai markets, which are set to open on Monday morning after a four-day holiday, are expected to fall by the maximum daily limit of 10 percent as banks, property and construction firms face investor ire over moves to restructure the Dubai economy.
more...

WallStreetJournal
The panic over Dubai`s debt problem tells us more about investors than it does about the emirate.
full story......

Dubai Debt crisis and the Media Blackout for Sunday London Times in UAE

2009-11-30T03:57:00.001+04:00

original sourche WallStreetJournal

DUBAI -- The Sunday London Times newspaper was removed by authorities from shelves in the United Arab Emirates on Sunday amid intensive reporting of Dubai's debt problems, an executive at the paper said.

The National Media Council ordered the paper blocked by distributors without providing a reason, an executive at the paper in Dubai told Zawya Dow Jones.

The Sunday Times edition available in the U.A.E. on Nov. 29 featured a double-page spread graphic illustrating Dubai's ruler Sheik Mohammed bin Rashid Al Maktoum sinking in a sea of debt. The Times wasn't given a reason for the block, or a timeframe when it will be lifted, the executive said.

A government official in Abu Dhabi, the capital of the U.A.E., said that the picture of Sheik Mohammed, which accompanied a story entitled: The sinking of Dubai's dream, was "offensive."

Under the U.A.E.'s media code, publications are prohibited from criticizing the sheikdom's rulers.

Local media and government officials have criticized international press coverage of Dubai's debt crisis.

Markets around the world fell last week after the government requested a debt standstill for one of its biggest conglomerates.

Earlier this month Dubai's Sheik Mohammed told reporters gathered at an investment conference in the city to "shut up" and stop criticizing the emirate and its crucial relationship with Abu Dhabi.

Dubai is struggling to deal with it debts estimated to exceed $80 billion.

The Sunday Times is part of News International, a unit of News Corp., owner of Dow Jones & Co. The Times and The Sunday Times are published in the U.A.E. through a local partner SAB Media.

Write to Andrew Critchlow at andrew.critchlow@dowjones.com

Dubai Financial Crisis - Actual News Dubai Debt Problems

2009-11-29T05:41:00.001+04:00

Telegraph UK 29 November 2009

Abu Dhabi will not race to Dubai`s rescue

Sheikh Mohammed of Dubai is under mounting pressure to explain the emirate’s debt problems, after Abu Dhabi indicated that it will not write a blank cheque to bail out its neighbour.
read more

From Bloomberg 29. November 2009
Samsung C & T stops Dubai Bridge Work as Nakheel halts payments

Wall Street Journal 29.November 2009
DUBAI (Zawya Dow Jones)--Debt-laden Dubai World's unit Jebel Ali Free Zone Authority, or Jafza, faces on Monday a coupon payment on a 7.5 billion U.A.E dirham ($2.04 billion) Islamic bond in the first key test of whether it will default.

The Islamic bond, or sukuk, was issued in November 2007 through a Cayman Islands-registered company called JAFZ Sukuk Limited and pays 130 basis points over the six-month Emirates Interbank Offered Rate, according to Zawya.com.

The coming coupon payment is estimated to be between AED125 million and AED135 million, according to analyst calculations.

Spokespersons for Dubai World declined to comment on the payment Saturday, a holiday in the U.A.E. The Jafza sukuk is the first payment due for a Dubai government-related entity since the restructuring announcement Wednesday, which sent global markets and banks into a panic before the weekend.

Dubai World's request for a standstill will include a key $3.52 billion bond owned by Nakheel, the developer behind Dubai's palm-shaped islands, that matures on Dec. 14.

Payments on the sukuk are made semi-annually, on May 27 and Nov. 27. Bankers said that payment is due on Monday, since Nov. 27 fell on a weekend in the U.A.E.

Barclays Capital, Deutsche Bank, Dubai Islamic Bank, and Lehman Brothers acted as joint lead managers and joint bookrunners, according to the bond prospectus. The sukuk is due November 2012.

Jafza operates a free trade zone and industrial parks in the port town of Jebel Ali, outside of the city of Dubai, and is a unit of Economic Zones World, or EZW. EZW is operated by Dubai World.

S&P and Moody's downgraded Jafza and other Dubai government related-entities Wednesday, after Dubai World said it would restructure and ask for a standstill on all debts until at least May 2010. S&P placed Jafza on creditwatch with negative implications. Moody's downgraded its issuer and debt ratings to Ba1 from Baa1.

Seoul officials meet to cope with Dubai debt crisis 29. November 2009

South Korea's financial authorities were to convene a meeting later on Sunday to gauge the fallout from the Dubai debt crisis and discuss countermeasures to stave off any possible impact on the nation's financial markets, officials said...... read more

Telegraph UK 29. November 2009

Tim Clark, president of Emirates Group, has said the Dubai business community is "shocked" by the financial crisis.

read more...

Telegraph UK 29. November 2009

Dubai an Emirate in crisis

.....Dubai is in trouble. We already knew that, long before the announcement last week that it wanted to delay payments on billions of dollars of debts owed by its Dubai World (DW) state holding company. But the trouble caused by a collapse in the property market put the city on a par with other states around the globe. This announcement was of a different order. It damaged the credibility of the city's government and, by extension, the United Arab Emirates (UAE) as a whole. ....
read more

Technorati-Tags: Debt Problems Dubai

Secenario - Why Dubai`s Debt Matters

2009-11-28T04:01:00.001+04:00

original source Forbes from Oxford Analytica

If Abu Dhabi doesn't mount a serious rescue operation, creditors are likely to seek legal redress against the defaulting Dubai government.

Dubai's heavily foreign investment-dependent economy began to unravel in September 2008 following the global credit crunch. Property prices fell steeply, share prices in publicly listed companies collapsed and confidence was badly shaken in the emirate's ability to survive the crunch. By the close of 2008, government-backed companies responsible for Dubai's development had accrued debts of more than 80 billion dollars.

Abu Dhabi bailout.
In February this year, following Dubai's difficulty in refinancing a $3.8 billion loan, the United Arab Emirates (UAE) Central Bank, backed by Abu Dhabi, subscribed to a $10 billion bond, with interest rates set at 4%. However, earlier this month, it became apparent that Dubai would need a much bigger capital injection, especially given that its largest property developer--Nakheel, a subsidiary of Dubai World--was due to refinance a $3.5 billion Islamic sukuk bond on December 14.

Article Controls
On November 24, it was announced that Abu Dhabi had provided an additional $5 billion loan:

--Significantly, insiders indicated that this loan came with strings attached, and that it was to be used to pay disgruntled foreign contractors rather than to re-finance the Nakheel debt.

--While little is known about Abu Dhabi's reasons for these limits on its assistance, it may have been reluctant to be associated with Nakheel, a company with problems considered to be too big to solve through loans.

Sovereign default ?

Although not technically an example of a sovereign default, the request has been viewed as such. The agencies have thus downgraded most government-backed Dubai companies and entities either to below investment grade or to junk status.

The credit default swap rate on Dubai debts rose by more than 100 basis points, taking it to 434 points.
As a result, the emirate's ability to seek additional credit on international markets has been sharply curtailed.

Political collapse ?

If Abu Dhabi does not mount a serious rescue operation, creditors are likely to seek legal redress against the defaulting Dubai government:

--In this scenario, 'Dubai Inc.' will be widely regarded as bankrupt and the ruling Al-Maktoum family held responsible, due to the 'blurred lines' between the government and the wealth of the ruling family.

--There would also be political ramifications. It would be unfeasible for Sheikh Mohammed or Sheikh Hamdan to remain in power following such a massive loss of prestige.

If, on the other hand, Abu Dhabi does agree to provide more credit, there will also be significant implications:

--It will do so only under very strict conditions, since it will be reluctant to pour money into rescuing failed projects.
--It will thus begin to dictate terms to Dubai, and almost certainly seek to centralize power in the UAE federation and rein in Dubai's autonomy.
--However, given the political culture of the Gulf states, such moves are likely to be made discretely, in order to allow the Dubai ruling family to save some face.

Outlook.
Dubai World's decision to delay paying its creditors is a serious miscalculation, since, by trying to restructure some of its largest debts, it has placed itself under close international scrutiny. This will make it extremely difficult for the company to acquire fresh credit, and increase the risks of further defaults. Only oil-rich Abu Dhabi is in a position to stage a financial rescue, but even if it does, Dubai is likely to emerge chastened, and to adopt a different approach towards economic development.

To read an extended version of this article, log on to Oxford Analytica's Web site.
Oxford Analytica is an independent strategic-consulting firm drawing on a network of more than 1,000 scholar experts at Oxford and other leading universities and research institutions around the world.
For more information, please visit Oxford Analytica here

Shocking - Dubai`s main investment fund seeks debt payment delay

2009-11-26T01:18:00.001+04:00

original source BBC

The government-owned investment company behind Dubai's rapid development drive has asked its creditors for a six-month delay on repaying its debts.

Dubai World, which has total debts of $59bn (£35bn), is asking creditors if it can postpone its forthcoming payments until May next year.

Dubai World has also appointed global accountancy group Deloitte to help with its financial restructuring.

The company has been hit hard by the global credit crunch and recession.

'Shocking'

The Dubai government said in a statement that the request to delay debt repayments also applied to property developer Nakheel, a Dubai World subsidiary.

"It's shocking because for the past few months the news coming out has given investors comfort that Dubai would most probably be able to meet its debt obligations," said analyst Shakeel Sarwar, of SICO Investment Bank.

Dubai is one of the seven self-governing emirates or states that make up the United Arab Emirates.

Analysts say the Dubai government has paid the price for a flamboyant economic model centred on foreign capital and giant construction projects.

Some have speculated it is likely to turn to the more economically conservative Abu Dhabi emirate to bail it out.

The Dubai World announcement was made on the eve of the Eid al-Adha Muslim festival, which will see many government agencies and companies close in Dubai until 6 December.

Update : Dubai bonds gained after Sheikh Mohammed reduced of the power of some top executives

2009-11-24T05:01:00.001+04:00

original Source Bloomberg

Dubai bonds gained after ruler Sheikh Mohammed Bin Rashid Al Maktoum reduced the power of some top executives as he tries to improve investor confidence in the emirate burdened by $80 billion of debt.

Dubai’s five-year Islamic bond, or sukuk, maturing in 2014 rose 0.11 cent to a three-day high of 100.63 cents on the dollar at 7:11 p.m. in Dubai, pushing the yield down to 6.243 percent, Bloomberg data show.

Sheikh Mohammed fired Omar Bin Sulaiman, the governor of the Dubai International Financial Centre, on Nov. 20 who had led efforts to transform Dubai into a Middle East finance hub. A day earlier, he removed three executives from Investment Corporation of Dubai, the state-holding company at the forefront of a debt-financed construction drive that collapsed last year.

“You might not understand completely what changes have happened and why, but you get the impression things are being done in a constructive way,” said Norval Loftus, the head of convertible bonds and sukuk at the Matrix Group Ltd. in London, which manages $2.5 billion of investments.

Investment Corporation of Dubai has stakes in more than 30 companies including Emirates Airline and Emirates NBD, the Persian Gulf’s biggest bank.

Dubailand

The executives removed from the board include Mohammad al-Gergawi, chairman of Dubai Holding, which owns developers including Dubai Properties LLC, Sama Dubai LLC and Tatweer LLC. Tatweer has put on hold a project to build “Dubailand,” a Disneyland-style leisure park that would be three times the size of Manhattan.

Sultan Ahmed Bin Sulayem, chairman of Dubai World, a state-run holding company that has about $59 billion of debt and other liabilities, was also removed. Dubai World controls property developer Nakheel PJSC, which has had to cancel plans for a new waterfront development the size of Hong Kong Island. Nakheel has to repay a $3.52 billion bond maturing in December.

The third executive deposed from the board is Mohammed Ali Alabbar, chairman of Emaar Properties PJSC, the largest developer in the U.A.E., which is building the world’s tallest tower.

‘Calculated Move’

“This is a very deliberate and calculated move that goes hand in hand with other efforts being made by the Government of Dubai to restore its credibility in the market,” said Chavan Bhogaita, head of credit research at National Bank of Abu Dhabi PJSC, the U.A.E.’s second- largest lender by assets. The emirate wants “to be seen to be taking proactive action to address the serious issues that have affected Dubai Inc. entities,” he said.

The ruler earlier this month took direct control over the emirate’s planning and supervisory agency. While Sheikh Mohammed is exerting control over the web of state-owned companies that he used to accelerate diversification away from oil, the deposed executives will keep their corporate positions. Bin Sulaiman stays as vice chairman of the U.A.E. central bank.

The Dubai government is in the final stages of preparing the second half of the bond issue, Alabbar said on Nov. 20. Investors will buy a “reasonable chunk” of the bond, he said. The bonds will be issued before the end of the year, Sheikh Ahmed bin Saeed Al-Maktoum, chairman of the emirate’s Supreme Fiscal Committee, said on Nov. 16.

“These developments are positive and in line with a strategy to provide the investor community more comforts,” said Jamil Hallak, head of credit trading at Standard Chartered bank in Dubai.

To contact the reporter on this story: Haris Anwar in Dubai on Hanwar2@bloomberg.net

Dubai - Sheikh Mohammed downgrade prominent figures

2009-11-24T04:46:00.001+04:00

original Source Bloomberg

Nov. 22 (Bloomberg) -- Dubai ruler Sheikh Mohammed Bin Rashid Al Maktoum consolidated his hold on the debt-laden emirate, downgrading powerful figures behind the city-state’s boom that turned to a bust.

Sheikh Mohammed on Nov. 20 sacked the governor of the Dubai International Financial Centre, Omar Bin Sulaiman, who had led efforts to transform Dubai into a Middle East finance hub. A day earlier, he dropped Mohammad al-Gergawi, Sultan Ahmed Bin Sulayem and Mohammed Ali Alabbar from the board of Dubai’s main holding company, the Investment Corporation of Dubai. The three were at the forefront of a construction drive that began in 2002 and collapsed last year after the global financial turmoil engulfed Dubai.

The announcement, which follows the replacement in May of Nasser al-Sheikh, former director of the emirate’s Department of Finance, heralds greater consolidation of so-called Dubai Inc., the web of competing, state-owned companies that Sheikh Mohammed used to accelerate the diversification of Dubai. Dubai is struggling under $80 billion of debt amassed in the process.

The replacement of the DIFC governor is part of efforts to improve the efficiency of government institutions and companies, and “consolidate the emirate’s growing importance as an international center for finance, business, trade, tourism and all services,” Mohammed Ibrahim Al Shaibani, director-general of the ruler’s court, said in an e-mailed statement on Nov. 20.

Transparency

This needs to be accompanied by greater transparency and better coordination between the various state-run companies, said Tristan Cooper, a Dubai-based Middle East sovereign analyst at Moody’s Investors Service.

“It’s difficult to read too much into the personnel changes at this stage, but it would be encouraging if it helped to improve coordination and information flow within Dubai’s large and disparate public sector,” Cooper said by e-mail.

The Dubai Financial Market General Index tumbled today to its lowest level in two months, losing 2.6 percent to 2,073.66. Abu Dhabi’s measure slipped 2 percent to its lowest since Sept. 2.

Bin Sulayem is chairman of Dubai World, a state-run holding company that has about $59 billion of debt and other liabilities. It controls property developer Nakheel PJSC, which has had to cancel plans for a new waterfront development the size of Hong Kong Island. Nakheel has to repay a $3.52 billion bond maturing in December.

Dubailand

Istithmar PJSC, the investment company controlled by Dubai World, may lose control of the W New York Union Square hotel in Manhattan at a foreclosure auction next month by holders of the mezzanine debt on the property. Dubai International Capital LLC, a private equity investor controlled by the emirate’s ruler, is said to be offering junior lenders a 40 percent stake in Almatis, a maker of alumina products, in a debt-for-equity swap.

Al-Gergawi is chairman of Dubai Holding, which owns developers including Dubai Properties LLC, Sama Dubai LLC and Tatweer LLC. Tatweer has put on hold a project to build “Dubailand,” a Disneyland-style leisure park that would be three times the size of Manhattan. Alabbar is chairman of Emaar Properties PJSC, the largest developer in the U.A.E., which is building the world’s tallest tower.

Dubai’s real-estate market was the worst affected by the global financial crisis. Home prices have tumbled about 50 percent from their peak, and may drop another 20 percent this year, Deutsche Bank AG said in June.

Bond Issue

The emirate will study the viability of projects more closely in the future, Sheikh Mohammed said Sept. 9. “We’ll be more careful now,” he said.

The actions of Dubai’s ruler may also be aimed at helping him shore up his position with regard to the wealthier neighboring emirate, Abu Dhabi, said Jean-Francois Seznec, a professor at Georgetown University’s Center for Contemporary Arab Studies in Washington.

Abu Dhabi, which has 90 percent of oil in the U.A.E., holder of the world’s sixth-largest crude reserves, bailed out it’s fellow emirate in February with a $10 billion Dubai bond issue subscribed entirely by the U.A.E. central bank. Dubai is seeking to raise another $10 billion, a significant portion from the federal government in Abu Dhabi. The government is in the final stages of preparing the second half of the bond issue, Alabbar said on Nov. 20.

The cost of protecting Dubai bonds from default rose 3 percent to 313 basis points on Nov. 20, five-year credit-default swap prices show. The contracts, which get more expensive as perceptions of credit quality worsen, traded at 287 basis points on Oct. 20, the lowest in 12 months, Bloomberg data show.

Bankruptcy

Sheikh Mohammed is trying to salvage his business empire by merging assets, said Christopher Davidson, a professor at Durham University in the U.K. and author of the 2008 book “Dubai: The Vulnerability of Success.” “The ruler’s main government-backed companies are on the verge of bankruptcy and rapid centralization of these bits and pieces is needed to hold them above water,” he said by phone.

In June, Emaar said it was in talks to combine with Dubai Properties, Sama Dubai and Tatweer as it aims to control the supply of new buildings amid a glut of homes.

Alabbar shrugged off his removal from the board of the investment body. “As business goes on, all organizations restructure,” he said Nov. 20. Al-Gergawi didn’t pick up his mobile phone and Bin Sulaiman and Bin Sulayem didn’t respond to interview requests via their spokespeople.

Scapegoats

Ahmed Humaid al-Tayer, the new governor of the DIFC, which is home to regional offices of banks including Goldman Sachs Group Inc. and Deutsche Bank AG, said yesterday he would pursue the same strategy as his predecessor. Al-Tayer is also chairman of Emirates NBD PJSC, the U.A.E.’s biggest bank by assets, and remains a member of the ICD board along with Al Shaibani, the head of the ruler’s court. The other four board members are Sheikh Mohammed, two of his sons and his uncle.

The four sidelined Dubai powerbrokers have to some extent been made scapegoats, according to Simon Henderson, an expert on the Gulf monarchies at the Washington Institute for Near East Policy.

“They were given authority and access to capital and told to go out there and expand Dubai, they were given a license and latitude, and to that extent, they were obeying orders,” he said.

To contact the reporter on this story: Henry Meyer in Dubai at hmeyer4@bloomberg.net.

Technorati-Tags: Dubai, sheikh Mohammed Rashid Al Maktoum

Dubai property prices may drop as much as 30 percent more

2009-11-19T23:24:00.001+04:00

original source Bloomberg

Nov. 18 (Bloomberg) -- Dubai home prices may take at least a decade to recover and increasing supply and a shrinking population will leave 25 percent of the sheikdom’s houses empty next year, according to UBS.

Prices may drop as much as 30 percent more, UBS analyst Saud Masud said in a note today. They have already fallen by more than 50 percent from the peak last year, making Dubai the worst-hit market in the global real estate slump.

Dubai’s construction boom petered out in the third quarter of last year after banks tightened lending and speculators left the market. UBS’s research contrasts with a Deutsche Bank report this month that said the market is “bottoming out” with slowing price declines and an increase in transactions. Masud said the market will probably reach its bottom in 2011.

Consolidation in the industry will result in asset writedowns, limiting the benefits of a possible merger of Emaar Properties LLC and three state-owned companies, UBS said. Emaar, the United Arab Emirates biggest real-estate developer, is in talks to join with state-controlled competitors Dubai Properties LLC, Sama Dubai LLC and Tatweer LLC.

Dubai’s population, which is 90 percent expatriate, may drop by 8 percent this year and another 2 percent in 2010, Masud said. Nearly half the workforce is employed in real estate or construction.

Banks in the United Arab Emirates have understated their non-performing loans and the total may grow to around five times the 27.8 billion dirhams ($7.57 billion) reported by the central bank in September, the Dubai-based analyst wrote.

Bank lending tied to real estate may be 35 to 40 percent of the total when including personal loans used for property investment. Central bank regulations cap real estate lending at 20 percent of a bank’s total. The loans could be 350 billion dirhams to 400 billion dirhams, almost double the stated 204 billion dirhams, UBS said.

Provisions for bad loans may grow to more than five times their current levels over the next 12 to 18 months, Masud wrote. Net provisions stood at 29 billion dirhams by the end of October, central bank data shows.

“We expect to see greater consolidation, higher provisions for non-performing loans, an increase in investor delinquencies and relatively lower end user demand for residential and commercial property,” Masud wrote.

Banks will face pressure to provide liquidity and late payments will probably present a continuing risk for contractors and subcontractors, he said.

To contact the reporter on this story: Zainab Fattah in Dubai on zfattah@bloomberg.net

Detained in Dubai - Support Group for Dubai Residents and Tourists who find themselves in Hot Water in Dubai

2009-11-18T06:28:00.002+04:00

original source 7Days Dubai 18 Nov, 2009

With hundreds of Brits being arrested each year and hundreds more other expats ending up on the wrong side of the law, a support group has been set up to reach out to residents and tourists who find themselves in hot water in Dubai.

Detained in Dubai is a non-profit organisation set up by Radha Sterling after she fought for the freedom of close friend and TV executive Cat Le-Huy, who was arrested on arrival in the emirate for possession of a jetlag drug that turned out to be legal both in the UK and the United Arab Emirates.

She said: “I ran a campaign for the release of Cat after he was detained last year. He was picked up in the airport in Dubai and arrested for having melatonin - a jetlag pill which is not even illegal in the UAE. He was held in prison for more than a month and eventually released without charge.”

After Le-Huy’s ordeal hit the headlines, Sterling was contacted by other people whose friends and families were going through the Dubai judicial system.

She said: “I decided to set up something more formal as I was contacted by a lot of people after what happened to Cat. I have a legal background and worked closely with Cat’s lawyers during his experience so gained a detailed knowledge of the legal system and I wanted to share that with people who need help.”

Detained in Dubai is manned by a team of solicitors with experience in corporate, criminal and civil law as well a cross-section of researchers and interns. The drive behind the group is to raise awareness of the UAE’s laws to help foreigners avoid getting into trouble in the first place.

But when the worst does happen, Sterling, who works in the media and has a degree in law, is on hand to talk people through the legal process.

Detained in Dubai offers advice and support and recommends lawyers, but mostly, it helps people understand what to expect from an unfamiliar court system.

Sterling said: “A lot of the cases we come across are when a foreigner has got themselves in trouble because they aren’t familiar with the law.

That comes from ignorance really, but we would like to raise awareness of the expectations of Dubai and to make it clear to people that it is not another America or Britain - there are a lot of very serious rules.”

Many of the cases Detained in Dubai has come across in the last eight weeks since its online launch are relating to drugs.

The UAE’s banned and controlled substance list is 49 pages long. Dozens of substances from cough medicine to anti-schizophrenia drugs are included on the inventory.

Even tiny traces of an illegal substance can lead to years in prison.

But it is not only drugs offences.

Sterling says: “We are seeing a lot of financial and business related cases now which are very complex. It can be difficult for people to know where to start.”

Detained in Dubai offers daily support to people, whatever their nationality, and also helps those who come out of the other side adjust to freedom when they are released.

Sterling said: “That’s an important part of what we do as well because people can find it difficult when they do eventually get home so we offer after care support.

“We understand what they have been through.”

For more on Detained in Dubai, go to www.detainedindubai.org, call +447050 686 745 or email info@detainedindubai.org

Cases helped by Sterling's group

In trouble with the boss
Dive instructor Roxanne Hillier was jailed for three months in May this year after being convicted of having an affair with her Emirati boss.
The 22-year-old South African, who was working in Sharjah, was arrested when police broke into the dive centre where she had decided to stay overnight while maintenance work was being carried out on her apartment.
She claimed that she was upstairs, in a locked room, when police swooped. Her married boss was downstairs checking dive equipment. She says she was questioned in Arabic and could not understand.
Both Hillier and her boss were charged, although he was later acquitted. Hillier was released on appeal after nine weeks behind bars.

Drug problem
German TV producer Cat Le-Huy was stopped as he arrived at Dubai Airport last year and subjected to a full search.
He was found with melatonin - a supplement used for combating jetlag. He signed a confession in Arabic admitting to possessing illegal drugs, which led to him being locked up in the airport’s detention centre. The authorities also tested some dust and dirt inside his suitcase and found 0.03g of cannabis - smaller than a grain of sugar. Eventually, Le-Huy was released without charge after a meeting between his counsel and the prosecution.

Words of warning
In September 2009, Sun McKay was heading home to Sydney from Afghanistan where he was working for a security firm.
The 32-year-old Australian was queuing for his connecting flight in Dubai when he decided to go to the cash machine. As he stepped out of line, he claims he was grabbed by a man who shouted at him in Arabic. McKay swore in response and was arrested as the man was a police officer.
He has been charged with using insulting language to a police officer and could face three years behind bars. McKay is awaiting a court hearing on December 9.

Ps: Before travel to UAE Tourists should study the Guidelines for Import of Personal Medicines
and check this List of Restricted and Controlled Drugs
Technorati-Tags: Dubai Touirsts detained, Support Grouo Detained in Dubai

Dynasty Zarooni Dubai back in the Headlines - Another crimninal complaint ?

2009-11-17T00:05:00.001+04:00

original source dailymail uk

For successful London jeweller Nadeem Osman, Dubai had all the bling in the world. Like thousands of others, he loved the city's fast life, with its sports cars, glitzy shopping malls and super-luxury hotels. And, of course, its sun and fabulous beaches.

The 37-year-old businessman from Balham, South London, holidayed there at least twice a year with his wife and even thought of moving there eventually, away from the rain and cold of England.

So 14 months ago, as an investment on the side, Mr Osman decided to buy four apartments in the city, which he planned to rent and also use as his holiday homes.

Losing its sparkle: Jeweller Nadeem Osman bought four flats in Dubai last year, just before the property market there crashed

He paid £580,000 for two off-plan apartments in Villa Caria, a residential block in Jumeirah South, and two more in a proposed hotel on the Dubai Waterfront, known as Hotel K. But his timing could not have been worse, with the Dubai property market then going into free fall: down 32 per cent in the first quarter of this year and 47 per cent in the second, according to Knight Frank.

Assetz, a property investment company, estimates that the fall may reach 70 per cent this year. Mr Osman bought the apartments through Dynasty Zarooni (DZ) - one of the city's biggest real estate companies, with a portfolio of properties worth £219million.

He paid the full sum upfront, assured that the money would be put into an escrow account which protects a buyer's money until the work is complete.

In January, one of the directors of DZ was arrested on a £60million fraud allegation - and since released without charge - but work on Hotel K has not even started. It is scheduled to finish by 2011. The company does not even own the land on which it was to be built.

Villa Caria was supposed to be completed by the end of this year, but DZ has told him it may take a further two years. Mr Osman has also been told that his money was not put into an escrow account, and he is unable to get any back.

'I don't know what to do,' he said. 'If it was in this country I could do something about it, but in Dubai it's so difficult as there is a huge backlog in the courts.'
Dynasty Zarooni has declined to comment after repeated attempts to contact it.
Mr Osman has now formed a group with ten other investors to decide whether to take legal action or file a criminal case.

Dubai's courts are struggling with a mountain of property cases totalling £3billion - as much as £500million may involve British investors.

Stuart Law, of Assetz, says Britons, who were the largest Western investors, were partly responsible for the crash as they inflated prices through their highly geared buy-to-let schemes.

'We've known of properties that were sold again and again about ten times one after another - it was good as each person made a profit, but the person who was left with the contract at the last was in trouble,' said Mr Law.

Dubai developers Cirrus and Kaizen disappear - Investors worried

2009-11-14T06:12:00.001+04:00

original source Construction Week Online Dubai, 14 November 2009

Confusion has broken out over the whereabouts of international real estate firms Cirrus Developments and Kaizen Developments.

Both developers are responsible for hundreds of millions of dollars worth of developments in Dubai and across the region, including Cirrus’ Aquarius Gate in the Waterfront area, and Kaizen’s Equinox Residences at Palm Jebel Ali.

Websites for the companies are no longer active, while phone numbers listed on their brochures have not connected.

Cirrus Developments had been developing Celestial Heights – a mixed-use project of three towers, in the Downtown Jebel Ali master development, but the project is now being looked after by a firm called Catalyst Project Consultants, Construction Week has learned.

“Cirrus was part of phase one of Celestial Heights, then the owners appointed Catalyst,” Catalyst Project Consultants’ director Israr Ahmed told CW.

“Cirrus have downsized and moved offices, but they handed over all work related to the project over a two month period.”

Ahmed also said that Catalyst was “not at all” related to Cirrus Developments but it did have links to Kaizen Developments whose logo featured on early Celestial Heights marketing materials.

The last number he had for Cirrus could not be connected.

Dubai’s Real Estate Regulatory Agency (Rera) confirmed to CW that a developer by the name of Kaizen One Investment Limited was an approved developer, but the phone number it had registered for Kaizen now belongs to a general trading company.

Significantly, the registered website that Rera had for Kaizen One Investment Limited was www.cirrusdevelopments.com, which is now defunct.

Construction Week eventually managed to reach Cirrus Developments’ brokerage number where a receptionist said: “Due to the [financial] crisis, we have suspended the brokerage”, but insisted that despite not appearing on Rera’s list of approved developers, the development side of the company was still in operation.

Both public relations firms which represented Kaizen and Cirrus in the past confirmed that they were no longer their clients.

Kaizen Developments is unreachable.

Do you work for Kaizen or Cirrus? Have you invested in their projects or have you worked on their projects? Please contact constructionweek online

Jumeirah Lake Towers - One more Dubai Property Disaster - Homes promised in 2007 won`t be ready before 2011

2009-11-14T03:41:00.001+04:00

original source Zawya
Dubai: Investors who paid as much as Dh1.7 million for apartments in a residential tower said they are no closer to moving in though the project should have been completed two years back.

Three 40-storey buildings at Jumeirah Lake Towers two residential towers and a business tower -- were due to be completed in 2007, but buyers have now been told that the buildings won't be ready before 2011.

They claimed that the developer Al Attar Properties altered the original plans from two-bedroom apartments to one-bedroom plus a study and changed the views they wanted. An official from Al Attar Propertiessaid the delays have been due to problems with regulations and reassured investors that construction work would begin "in four weeks' time".

Mohammad Makram, an Egyptian national, said he is one of 60 investors affected and is currently forced to rent as well as pay off a bank loan that he took for the apartment.

He bought a Dh1 million freehold two-bedroom apartment in 2007 and was originally told it would be completed at the end of that year.

Sherif Atef, an Egyptian expat, who spent Dh1.7 million on a two-bedroom apartment in the Vista Del Lago tower, said: "It's been so frustrating since I bought the apartment in August 2008. I don't think we'll see the money again."

"We have taken independent experts to the area and they said that there is no way a 40-storey building will be ready by 2011 and that's even if they start work right away," Makram said.

He added that the group decided to wait for a change in the law in the new year before moving court. "My life has been on hold for two years. I had been planning to get married but that'll be delayed as I don't know where we may be living," he said.

Many investors have been de-manding their money back but Al Attar Properties has been refusing, Makram added.

Absoulte unhappy Nakheel Propery Buyers - Dubai Jebel Ali Palm complaints investigated

2009-11-12T22:58:00.001+04:00

original source The National

The Dubai Land Department (DLD) will investigate complaints over the stalled Nakheel Palm Jebel Ali project after about 125 disgruntled property buyers petitioned the authority.

Nakheel has offered investors alternative homes in other projects that are either completed or already under construction, including at International City, Jumeirah Heights and Al Furjan.

“After patiently waiting for seven years and putting all of our hard-earned money into this project, we are being given the option to transfer to inferior properties which are not in the same league as those promised to us,” the investors said in a letter to the DLD. “This is not what was sold to us.” An official said the department would compile a report on the situation.

Palm Jebel Ali, the second part of the Palm island trilogy, was launched by Nakheel in 2003 and was designed to accommodate up to 250,000 people and add 70km of beachfront to Dubai. Work came to a standstill on the vast artificial island development after property prices started to tumble last year.
read the rest of the Report The National

Japanese construction companies are facing very serious debt problems as Dubai can’t pay

2009-11-10T22:00:00.001+04:00

original source The National

Japanese builders are owed billions of dollars on projects that include the Dubai Metro and Palm Island, according to a top diplomat and leading contractors from the country,
Japanese builders have played a pivotal role in Dubai’s construction boom, spearheading work on the Dh28 billion (US$7.6bn) Metro and helping to build Nakheel’s palm-shaped islands off the emirate’s coast.

But as the global financial crisis brought many projects to a standstill, an increasing number of foreign companies, especially builders, have reported payment problems mainly linked to Dubai developers.

“Some Japanese construction companies are facing very serious debt problems as Dubai can’t pay,” said Seiichi Otsuka, the Japanese consul general in Dubai. “Some companies engaged with the construction of the Metro are facing some payment issues.” He said companies were also owed money by Nakheel.
read the rest of this article...The National