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Dubai to fulfill commitments inside UAE, abroad: official

(Xinhua)
Updated: 2009-12-07 21:57

ABU DHABI: The Dubai government is capable of honoring and meeting its commitments inside and outside the United Arab Emirates (UAE), a senior official said Monday.

A distinction should be made between the Dubai government and Dubai World, one of Dubai's largest and most important conglomerates, Abdul Rahman Al Saleh, director general of Dubai Finance Department, told al-Jazeera TV, according to the official news agency WAM.

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He reiterated the Dubai government's announcement that it would not guarantee debts of the group, which is made up of several companies -- including real estate developer Nakheel and Limitless -- operating in various sectors.

"Articles of association of Dubai World stipulates that the emirate's government shall not guarantee its debts," Al Saleh said.

He stressed that the restructuring of Dubai World is a natural procedure that can happen in many countries and companies.

"The media has blown the issue of restructuring part of the group's debts including the delay of repaying Nakheel's debts out of proportion," he said, adding that restructuring of companies is a frequent practice worldwide in many countries and companies.

"The aim of restructuring is to allow the group steam ahead with a new shape and keep abreast of changes," Al Saleh said.

Asked about the possibility of putting off projects being undertaken by Dubai World, he said, "It is better and wise to delay projects that have not been executed yet."

Al Saleh did not rule out the possibility of selling some assets of the group in Dubai or abroad.

"Selling of some assets is a natural act in order to bolster the financial situation of the group in such circumstances," he said.

The official described Dubai World as "active" in many sectors, saying only its real estate sector was hit by the international financial crisis.

The government of Dubai, a member of the oil-rich United Arab Emirates, announced on November 25 that it would ask Dubai World's creditors to agree to a debt moratorium of at least six months as a first step towards restructuring.

The announcement, described by ratings agency Standard and Poor's as a default, provided the focus for global financial markets and media, affecting stock markets around the world.