David Beckham and Brad Pitt are believed to be among the stars caught up in Dubai’s spiralling credit crisis.
The pair have seen the value of property they bought in the Gulf plummet as Dubai struggles under a mountain of debt.
Things have now gone from bad to worse after Nakheel, the island’s developer, and its parent company Dubai World yesterday made a request to suspend debt repayments.
The Dubai government has been forced to call in accountants Deloitte to advise on a financial restructuring, as its economy buckles under $80billion of debt.
Dubai World, the conglomerate which was the driving force behind the emirate’s rapid expansion, is asking creditors to give it some breathing space on the $59billion of loans racked up by the firm and its subsidiary Nakheel.
The concern is that Nakheel will be unable to continue developing the Palm Jumeirah and other neighbouring projects, leaving Dubai a construction site.
The request for a ‘standstill agreement’ on the debt has raised fears that the state could default on some of its loans.
Dubai World is likely to be forced into asset sales after the credit crisis triggered a crash in the value of its property assets and decimated finance and tourism in the state. House prices in Dubai slumped by 47 per cent in the second quarter, compared with a year ago.
November 27, 2009 at 6:45 am
60 billion? Heck the US owes trillions! Dubai is still gold.
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November 29, 2009 at 2:26 pm
@Merv The Perv That 60 billion is only for one company – The boom over there was always going to hit a tough spot at some stage
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