The Dubai rulers are amongst the top 100 richest people in the world, and they have borrowed over 80 billion dollars from various countries and lenders over the last five years as part of their business ambition.
The government opened a new company called Dubai World , to spear head the real estate creation and development on reclaimed land sprawling over thousands of acres. The process gained steam in 2007 when the entire globe was looking in ship shape condition, but the 2008 global financial meltdown has cost the company very badly.
Now it is unable to sell over 50% of the properties even at half the cost, and that has forced the company to tell all it’s lenders that it cannot make any repayments for the next six months. Does that mean that it will recover in the next six months ?
No…This could only be a prelude to a bigger dose of bad news to follow. Already the company has revamped the entire management of the company and is expecting to force the creditors to take a sizable cut in their debts. And that in turn could lead to a big global shakeout of real estate sector.
So be careful and plan your investments carefully in the coming months.
Dubai world to trigger next financial mess
November - 26 - 2009 - Thursday
