It’s a three ring circus in Dubai, the debts are stacking up and causing Dubai to sell all kinds of properties all over the world. According to the Londonian newspaper Times, Dubai’s Royal Investment Capital has set to sale a long line of properties which can stretch around the block (any block you pick in case you have wondered): Cirque du Soleil, prime commercial real estate in the heart of London, shares in the Standard Chartered Bank and even the luxury boat “Queen Elizabeth the Second” (QE2).
Times also reports the sell is intended to raise money which will help deal with the massive debts that “DubaiWorld”, the investment capital of the Persian Gulf residing emirate, has accumulated. The debts sum up to 22$ billion, and experts predict that the DubaiWorld’s financial advisors will try and sell each property seperately instead of trying to locate a single purchaser for the entire portfolio. “Istithmar World” which is a private investment arm of DubaiWorld holds most of the properties which will be put up for grab.
Just like DubaiWorld, Istithmar World was founded in order to make hefty profits in a time of prosperity in the world’s capital markets, which ended with the beginning of the sub-prime crisis and the credit absence which followed. Amongst the rest Istithmar purchased Barney’s, New York’s W and Oriental Mandarin Hotels (which was sold 283$ million short lately) and as aforementioned prime real estate in the heart of London. By the way, 2.2% ownership of the Standard Chartered Bank is worth a nice round billion dollar.
Istithmar funded all these by investing some 18$ billion between 2003 and 2007. “Only” 3.8$ of this sum was funded by Istithmar own money, as for the rest of it- loans did the trick. In that shopping spree, Istithmar acquired its crown jewel the QE2 luxury boat- which is one of the biggest of its kind. The boat was bought by the foundation in June 2007 for 100$ million, in order to make it a floating luxury hotel near the coast of Dubai.
The plan never succeeded and now the boat itself is offered for purchase. All the sales will be conducted by the major accounting firm Deloitte and Touche, which is in charge of DubaiWorld’s entire debt “rendition” operation. One last thing, in case you do decide to buy the circus or the boat if you wish, you must get a permission first for DubaiWorld’s biggest creditors: HSBC, Lloyds and the Royal Bank of Scotland. “Bona fortuna” and enjoy your shopping.
The CEO Game.