Dubai World sale of crown jewels seen as last option

[Newsjock]

Source: Reuters

Dubai World's willingness to sell prized assets such as ports operator DP World to pay down its debt pile is considered such a drastic move that analysts see it more as a last-resort bargaining tactic.

Documents obtained by Reuters this week revealed the surprising news that the debt-laden conglomerate was willing to let go of "strategic assets" such as DP World, Jebel Ali Free Zone and Dubai Maritime City (DMC) as part of a $19.4-billion fundraising effort as it tries to reach a restructuring deal with creditors by October 1.

... The lack of a back-up plan, reliance on a global economic recovery in its restructuring plan, and the deterioration in the value of its international investment portfolio, all leave Dubai World -- and by extension Dubai -- in a tight spot.

Even if the company manages to offload all its international assets before the clock runs out for its more prized possessions, the proceeds from these sales may not help much in repaying its mounting debt burden, signaling the extent of depletion in the value of its trophy assets.

Read more: http://www.reuters.com/article/idUSTRE67P2WJ20100826

[Liberal_in_LA]

1. interesting

[gratuitous]

2. Gee, this story sinks without a trace

But the major media in our country can't get enough of "irresponsible" homeowners in the U.S. who committed the cardinal sin of getting steered into overpriced real property by banksters eager to make their loan commission. Dubai World, which actually did spend money irresponsibly on the theory that the wealth would flow forever, doesn't get so much as a "tut, tut" from the talking chuckleheads at CNBC or the various and sundry money honey on the other financial programs.

And I wonder which default has a more profound effect on the financiers' bottom line: Dubai World's massive debt or some schlub in Pennsauken who's underwater on his dream home?