Dubai World, which has developed some of the largest neighbourhoods in Dubai — including the Palm islands, International City, Jumeirah Lake Towers and Discovery Gardens, among others, has been contributing to Dubai's economy by attracting investments into the emirate.
However, its announcement that it would restructure $26 billion (Dh95.6 billion) in debt repayments shook the global financial markets.
With assets worth nearly $100 billion, Dubai World — the largest holding company in Dubai — is in a comfortable position to meet its immediate debt obligation of $9 billion.
The company on October 15 completed a restructuring to save $800 million over the next three years.
For readers who are unfamiliar with Dubai World, below are some key facts.
- What is Dubai World?
Dubai World is a state-owned holding company that manages a number of businesses across a wide range of industries, namely transport and logistics, dry docks and martitime, investment and financial services and urban development. Over the past decade, the firm has been pushing forward on an aggressive growth plan to transform itself into a hub for finance and tourism in the region.
- When was it formed?
In 2006.
- How important is Dubai World to Dubai's economy?
It is the largest holding company in the UAE and billed as one of the world's largest holding companies. Its subsidiaries have developed a sizeable chunk of the city of Dubai, including the Palm Jumeirah, The Palm Jebel Ali, The World — a cluster of 300 man-made islands, International City, The Gardens, Discovery Gardens, Jumeirah Lake Towers, Dubai Maritime City, Jumeirah Park, Jumeirah Village South, Ibn Battuta Mall, Jebel Ali Free Zone, Downtown Jebel Ali, Dragon Mart, Jumeirah Islands and Jumeirah Heights.
- How many people are employed in Dubai World?
Dubai World was launched as a holding company in 2006 with more than 50,000 which grew to 70,000 employees including 45,000 overseas in 2009.
As part of the company's restructure guided by Deloitte consultant, Dubai World recently laid off 10,500 employees worldwide.
- What is its global reach?
The company has employees in over 100 cities around the globe and has extensive real estate investments in the United States, the United Kingdom and South Africa. Its port operations extend across six continents.
- How much does Dubai World owe?
To facilitate its expansion, Dubai World borrowed heavily. Its debts and liabilities till 2008 had stood at $59 billion. However, the company has reduced that burden significantly. Dubai World yesterday said the value of debt carried by the companies subject to the restructuring process amounts to approximately $26 billion, of which approximately $6 billion relates to the Nakheel sukuk [Islamic bonds].
- What are its subsidiaries?
Dubai World's portfolio comprises DP World, one of the world's largest marine terminal operators, Nakheel, one of Dubai's largest property developers, Istithmar World, Dry docks World, Dubai Maritime City, Economic Zones World which operates several free zones around the world including Jafza (Jebel Ali Free Zone Authority) and TechnoPark in Dubai, Limitless — a master developer with projects across the world, Infinity World Holding, Leisurecorp, a global sports and leisure investment group, Dubai World Africa, which oversees the development and portfolio of investments in the continent and Istithmar World, the group's investment arm. The total number of Dubai World subsidiaries is estimated to have reached 50 prior to the restructuring.
- Who are Dubai World's creditors?
Reports state that Dubai World has 70 creditors. While a full list has not yet been published, many of the world's biggest Western banks are likely to feature including HSBC, Standard Chartered, RBS, Lloyds Banking Group and National Bank of Abu Dhabi.
- What will happen to Dubai World's assets?
The restructuring of Dubai World will mean some of its assets may be sold which include the Turnberry golf course in Scotland and the former cruise ship QE2.
- How important is Dubai world to other markets? How has this affected the world markets?
Following Dubai World's announcement on November 25 that it would restructure $26 billion of its $59 billion in total debts, stock indices fell worldwide triggering the biggest stock market slump in three months in Asia and Europe's worst rout since April.
- What is being done to help?
The Central Bank of the UAE has said that it will set up a facility to provide banks with extra liquidity, however, the Dubai government announced that it would not guarantee the debt of Dubai World.
Data
- $59b: total debt of Dubai World
- $8.32b: Dubai World's total liabilities in 2008
- $621m: DP World's profitsin 2008
- $3.2b: Revenues achieved by DP World in 2008
- $26b: Debt Dubai World wants to restructure
- 70,000 : Number of employeesin Dubai World
