The Dubai government on Friday said it fully expected the fallout from its massive debt problem and promised to pump in all necessary resources to ensure long-term success of Dubai World.
“The government is spearheading the restructuring of this commercial operation in the full knowledge of how the markets would react,” Dubai Government’s Supreme Fiscal Committee Chairman Shaikh Ahmad Bin Saeed Al Maktoum said in a statement.
He said the government’s intervention in Dubai World was carefully planned and “reflects its specific financial position.”
“We want to ensure resources are deployed in the full knowledge that they are used to enhance the businesses of the Dubai World Group, build on the restructuring that has already been taking place and ensure long term commercial success,” Gulf News quoted Shaikh Ahmad as saying.
Dubai World, an investment company that manages and supervises a portfolio of businesses and projects for the Dubai Government, on Thursday said it would ask creditors for a “standstill” on paying back its $60 billion debt until at least May, 2010.
Markets across the world went into a tailspin after the report. The FTSE 100, suffered its worst single-day dip since March on Thursday. Shares in Asian exchanges also got affected by the tremors of Dubai debt.