Shaikh Ahmad appointed Dubai World chairman

Dubai: Shaikh Ahmad Bin Saeed Al Maktoum, President of Dubai Civil Aviation Authority and Chairman and Chief Executive of Emirates airline and Group, will lead Dubai World — the emirate's biggest conglomerate — as the chairman of its new board.

His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, on Sunday issued a decree restructuring the board of Dubai World.

This is the second restructuring of the group that owns major port and real estate entities such as DP World, Nakheel, Istithmar and Dubai Drydocks.

It follows the first round announced in October 2009, a month before Dubai World sought a standstill agreement to restructure about $26 billion of debt.

However, the group reached a deal with creditors to restructure the debts following a cash injection by the Government.

The change at the group's board is seen as a natural move to put the conglomerate back in business.

Shaikh Ahmad has been helping the Government restructure its finances as chairman of the Supreme Fiscal Committee. His nomination was widely expected.

Economists and analysts say following the accord between Dubai World and its creditors there has been a significant improvement in Dubai's credit standing among international investors.

Investor confidence

Shady Shaher, economist at Standard Chartered, said: "Dubai World's successful restructuring has boosted the confidence of international investors in Dubai and Dubai-based entities.

"This is reflected in the strong demand for debt issues by both Dubai Government and Dubai-based corporate entities."

While the Government of Dubai raised $1.25 billion in September, property developer Emaar issued a $500 million convertible issue and the Dubai Electricity and Water Authority issued $2 billion through a dual tranche bond issue in its second foray into the market this year.

Berna Bayazitoglu, a Credit Suisse analyst, said: "Dubai World credit [restructuring accord] has helped to ease concerns over Dubai's debt crisis, boosting investor confidence. The eventual resolution of the Dubai World saga should lead to greater improvements in banking and financial conditions by the end of 2010 and into 2011."

The members of the restructured Dubai World board are Mohammad Ebrahim Al Shaibani, Director-General of the Dubai Ruler's Court; Ahmad Humaid Al Tayer, Governor of the Dubai International Financial Centre; Abdul Rahman Al Saleh, Director General of the Finance Department; Hamad Mubarak Bu Amim, Director-General of the Dubai Chamber; Sa'adi Abdul Rahman Hassan Al Rais and Sun Yong Chang.

About the decree

The decree determines jurisdictions and responsibilities of the newly formed board, which include drawing up the general policy of Dubai World and its subsidiaries, and supervising its implementation.

The former Dubai World Chairman was Sultan Bin Ahmad Bin Sulayem.

The board will be responsible for studying investments of Dubai World in commercial, industrial, agricultural and real estate projects, as well as in service and financial projects, and any other activities decided by the board to be invested in.

The board will also be responsible for studying reports on the activities of the company's subsidiaries and their financial status so as to take the appropriate decisions regarding them.

The responsibilities also include endorsing restructuring plans of the company and its subsidiaries, approving annual general budget, closing accounts and administrative and financial regulations. The board will assume the responsibility of approving finance and borrowing from banking institutions and offering financial guarantees. It will approve sale, purchase and lease of properties, bonds and shares and other securities and properties owned by Dubai World and its subsidiaries.

New board of Dubai World

Chairman: Shaikh Ahmad Bin Saeed Al Maktoum

Members:

With input from WAM