Dubai World requests debt "stand still"

• Source: Global Times
• [17:58 November 27 2009]
• Comments

Dubai World Group, Dubai's main development engine, announced Wednesday it is asking for a six-month reprieve on paying its bills, causing a drop in world markets Thursday and raising questions about Dubai's reputation as a Gulf magnet for international investment.

According to the Group, it will ask creditors for a "standstill" on paying back its $60 billion debt until at least May next year.

Just after the announcement, in Europe, the FTSE 100, Germany's DAX and the CAC-40 in France opened sharply lower. Earlier in Asia, the Shanghai index sank 119.19 points, or 3.6 percent, in the biggest one-day fall since Aug. 31. Hong Kong's Hang Seng shed 1.8 percent to 22,210.41.

Also, Dubai's move raised concerns about debt across the Gulf Region. Prices to insure debt from Abu Dhabi, Qatar, Saudi Arabia and Bahrain all rose by double-digit percentages Thursday, according to data from CMA DataVision.

Dubai became the Gulf's biggest credit crunch victim a year ago due to the global financial crisis.