Investors could lose billions
Dubai’s government announced that it would not stand behind its wholly-owned subsidiary Dubai World, sparking fears that investors could lose billions, reported the Times.
The newspaper said that the comment from the Director General of Dubai’s Department of Finance, Abdulrahman al-Saleh, effectively confirms that the country does not have enough money to repay Dubai World’s $60bn of liabilities.
Dubai's Department of Finance said creditors will be affected in “the short term” by the Dubai World's restructuring.
The state owned conglomerate asked for a six-month standstill on repaying its debts last week.
The Times said that around 70 institutions have loaned Dubai World money in recent years. Royal Bank of Scotland was named as one bank that had arranged loans for Dubai World.
See more analysis: The implications of Dubai Worlds debt