Dubai: Debt is no longer a big concern for Dubai's economy as some of the leading government-owned entities have made significant progress in restructuring their obligations, Shaikh Ahmad Bin Saeed Al Maktoum, Chairman of the Dubai Supreme Fiscal Committee, said on Sunday.
Addressing a media briefing attended by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, Shaikh Ahmad said: "Dubai World is now on a sound financial footing, and is fully focused on its core business. Dubai Holding, which is facing some challenges in some of its assets, is being seriously addressed."
Although Shaikh Mohammad did not speak at the forum, later when asked by reporters whether he was hopeful over Dubai's restructuring, he said: "I am optimistic."
Editorial: Dubai firmly in control of its finances
Acknowledging the complexities involved in Dubai World's restructuring, Shaikh Ahmad said the restructuring was finalised in 10 months and is well into the implementation phase.
"The challenges in Dubai Holding are in no way of the magnitude seen at Dubai World. We are very confident that similar results seen at Dubai World will be achieved here too," he said.
Senior government executives yesterday addressed the media on state of Dubai's economy and the overall debt situation. Allaying fears of excessive debt burden, Mohammad Ebrahim Al Shaibani, Director-General of the Dubai Ruler's Court, said the sovereign debt burden of Dubai is much less than what is being reported.
"The current sovereign debt of Dubai is about $30 billion (Dh110.18 billion). Various government-owned entities have varying levels of operational debts and these are required for ongoing investment programmes and are backed by solid assets," said Al Shaibani.
Not worried
Ahmad Humaid Al Tayer, Governor of the Dubai International Financial Centre, said Dubai is not worried about the debt maturities in 2011 and added that Dubai can manage to meet its fin-ancial obligations without further help from the UAE Central Bank.
Senior government officials said while Dubai's economy is on a strong recovery path, the government is working on diversifying its funding sources and restructuring their finances.
"We continue to diversify our sources of funding and to share the wealth in our economy we are working on opening the capital of some of our leading companies to our public," said Shaikh Ahmad.
Government officials confirmed that more Dubai entities could be raising funds on the bond market as the economy revives. While the Dubai Government raised $1.25 billion through a bond issue in September, various Dubai entities together raised $2.5 billion through bonds after the Dubai World restructuring.
Property developer Nakheel, which is trying to reach an agreement on a proposed restructuring plan, said yesterday that it is planning a sukuk issue early next year.
Prime assets: Sale not an option
Dubai has no plans to sell strategic assets to finance its debt obligations, senior government officials said on Sunday.
While selective privatisation of some of the government owned businesses are being considered as an option for raising funds, officials dismissed suggestions of asset sales.
"Asset sales are not on the cards. While strategic assets owned by Government of Dubai are not for sale, we will consider selling some of our portfolio investments abroad when the valuations are right," said Mohammad Ebrahim Al Shaibani, Director-General of the Dubai Ruler's Court.
