 | This article needs to beupdated. Please help update this article to reflect recent events or newly available information.(July 2016) |
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| Company type | Government owned |
|---|---|
| Industry | Diversified investments |
| Founded | 2 July 1969 |
| Headquarters | , |
Area served | 30 cities in 12 countries |
Key people | Ahmed bin Saeed Al Maktoum, Chairman Jamal Majid Bin Thaniah, CEO |
| Revenue |  US$18 billion (2008) |
| US$1.4 billion (2008) | |
| US$1.17 billion (2008) | |
Number of employees | 5000+ |
| Parent | Dubai Inc. |
| Subsidiaries | Dubai Ports World Jafza Dubai Drydocks Maritime City Tamweel Tejari Leisurecorp Istithmar World Nakheel Properties DUTech Island Global Yachting |
Dubai World (Arabic:دبي العالمية) is aninvestment company that manages and supervises a portfolio of businesses and projects for theGovernment of Dubai across a wide range of industry segments and projects that promoteDubai as a hub for commerce and trading. As a subsidiary ofDubai Inc., it is the emirate's flag bearer in global investments and has a central role in the direction of Dubai's economy. Assets includeDP World, which caused considerable controversy when trying to take over six US ports, its property arm, Nakheel, which builtThe Palm Islands andThe World developments, andIstithmar World, its investment company.Ahmed bin Saeed Al Maktoum chairs it.
Dubai World was established under a decree ratified on 2 March 2006 bySheikhMohammed bin Rashid Al Maktoum, Ruler ofDubai. He is also the majority stakeholder in Dubai World.[citation needed]
On 2 July 2006, it was launched as aholding company with more than 50,000 employees in over 100 global cities.[citation needed] The group now has extensive real estate investments in the United States, theUnited Kingdom and South Africa. Dubai World made headlines in March 2008 after its chairman, Sultan Ahmed bin Sulayem, threatened to take the fund's money out of Europe.[1] Dubai World's threats came shortly after theEuropean Union attempted to lay out "a set of principles for transparency, predictability and accountability" forsovereign wealth funds.[2]
On 26 November 2009, Dubai World proposed to delay repayment of its debt,[3] which raised the risk of the largest government default since theArgentine debt restructuring in 2001. Dubai World, the investment vehicle for the emirate, asked to delay for six months payment on $26 billion of debt.[4][5][6] The extent of the debt rattled many markets causing many indices to drop; including oil prices. U.S. stocks fell sharply but rebounded from their lows as investors concluded that the damage might be contained. The Dow Jones industrial average lost about 155 points, or roughly 1.5 percent, in a shortened trading day, and other stock averages also sank. Oil prices plunged as much as 7 percent before recovering some ground later in the day.
On 12 December 2010, Dubai namedSheikhAhmed bin Saeed Al Maktoum, head ofEmirates airline and uncle of the state's ruler, as chairman of Dubai World[7] in a board revamp a year after the company said it would halt loan repayments, roiling markets. He replacedSultan Ahmed bin Sulayem.
Andrew (Andy) Watson, has been serving as the managing director at Dubai World since July 2011.[8]
On 29 January 2013, Drydocks World signed a memorandum of understanding for a US$2.5 billion joint venture partnership withIndonesia to develop a maritime cluster in the Asian country that would serve, among others, the petrochemicals industry.[9]
In March 2022, its subsidiary DP World'sP&O Ferries divisionsacked 800 longstanding crewmembers and caused backlash in the United Kingdom, potentially putting the tax status of DP World's London and Southamptonfree ports at risk.[10]
During theGreat Recession, Dubai's real estate market declined after a six-year boom. On 25 November 2009, the Dubai government announced that the company "intends to ask all providers of financing to Dubai World to 'standstill'[11] and extendmaturities until at least 30 May 2010".[12] The company had laid off 10,500 employees worldwide.[13] At that time, Dubai World had debts of $59-billion, accounting for nearly three-quarters of the emirate's US$80-billion debt.[14] This includes a US$3.5-billion loan which the company was unable to repay by its December deadline.[15]
In response to the government announced moratorium of Dubai World's debts, bothMoody's andStandard & Poor's Investors Services heavily downgraded the debt of various Dubai government-related entities with interests in property, utilities, commercial operations and commodities trading. In Moody's case, the downgrade meant that the affected agencies lost their investment grade status.[16]
Concerns over the fallout from Dubai's debt problems contributed to the main European stock indexes falling over 3% on 26 November. This was followed by drops in Asian stocks on 27 November. However the European stock markets rebounded as investors' fears subsequently subsided as they decided the estimated debt wasn't big enough to trigger a systemic failure in global financial markets. "For now, the market is taking the view that the Dubai debt issue may be a storm rather than a hurricane," said Jane Foley, a research director at Forex.com in London.[17][18][19][20] The American markets were closed on 26 November but American stocks fell on the afternoon of 27 November as similar fears rattledWall Street in a thinly-traded half-day session. TheDow Jones Industrial Average (INDU) fell 155 points, or 1.5%, after closing 25 November at a 13-month high. The Dow had lost 233 points in the morning.[21] Also, concerns of the crisis led to a sharp rally in the U.S. dollar andJapanese Yen against most other world currencies as these currencies had been perceived as"safe haven" currencies during times of uncertainty.[22]
An unnamed senior official told news agencies on 28 November thatAbu Dhabi, the wealthy capital of theUnited Arab Emirates, would "pick and choose" how to assist Dubai World. "We will look at Dubai's commitments and approach them on a case-by-case basis," the official told theReuters news agency by telephone, adding: "It does not mean that Abu Dhabi will underwrite all of their debts." Meanwhile,India'scentral bank governor said an assessment of the impact of Dubai's debt problems was needed before deciding on a response. "We should not react to instant news like this. One lesson of the crisis is that we must study the developments, and I think we must measure the extent of the problem there and how it impacts India,"Duvvuri Subbarao said inHyderabad, India.[23]
A public statement on 30 November 2009, of the Dubai Finance Department Director-General, that the Dubai World debts are"not guaranteed by the government" appears to correctly reflect the legal position, as the Dubai Government were not required by the lenders, and nor did they provide, any contractual guarantees in respect of the Dubai World debt:
Officials in the United Arab Emirates tried on 1 December to calm investors and the public over the Dubai World debt crisis, and the company itself said it was seeking to renegotiate only the $26 billion in obligations held by its troubled real estate developer,Nakheel. It also said that it had hiredMoelis & Company, the investment boutique headed byKen Moelis, a formerUBS banker, to be its adviser.Rothschild is also advising Dubai World. Shares in Dubai and Abu Dhabi were down for a second day, with both key indexes declining about 6%. On 30 November, shares dropped in Dubai and Abu Dhabi by 7.3% and 8.3%, respectively.[24]
On 14 December 2009 the Dubai government received $10 billion in surprise aid from Abu Dhabi for debt-laden Dubai World, which said it would use $4.1 billion of it to repay its Nakheel unit's Islamic bond maturing on the same day.[25]
As of 24 January 2010 Dubai World's property assets have exceeded US$120 billion, so that it could cover its debt of US$57 billion.[26]
Dubai World on 20 May 2010 said that it had reached an agreement "in principle" with most of its bank lenders to restructure debt worth $23.5bn (£16.4bn). It would be left with debts of $14.4bn after the restructuring. But the deal must still be approved by other banks that were not involved in the negotiations. The terms of the restructuring, include converting $8.9bn of government debt into equity. The government ofDubai and Dubai World had tabled this offer to bank lenders in March 2010 after three months of negotiations.[27]
