Christmas has come early folks
"Dubai World debt 'not guaranteed' by government" quoted by the BBC
HSBC Takes a dose of its own medicine, lets watch them try to wangle out of this one!
Dubai government: Dubai World is not state-guaranteed
By Nicholas Paler | 14:13:11 | 30 November 2009
The Dubai government has today distanced itself from debt-laden state-owned company Dubai World in a statement which will stoke fears about how secure the region is.
The director general of the country's department of finance, Abdulrahman al-Saleh, reportedly said that the company's debts will not be guaranteed by the government, quashing the earlier assumption that it would support the business unconditionally.
According to Reuters, Saleh said: 'Creditors need to take part of the responsibility for their decision to lend to the companies. They think Dubai World is part of the government, which is not correct.'
Last week markets around the world were stunned when it emerged Dubai World - one of the Emirate's largest holding firms - and its subsidiary Nakheel had asked for a six-month delay in repaying $5.7 billion of debt due for maturity in the next few months.
The debt was part of the group's overall borrowings which has been estimated initially at $59 billion.
Saleh added: 'The government is the owner of the company, but since its foundation it was established that the company is not guaranteed by the government', before adding that the group 's borrowings were made based on its own projects, and 'not the guarantee of the government.'
Investors are waiting for clarity about the extent of the company's debts, amid worries about exposure to Dubai World.
