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Dubai may sell key firms’ stakes

Dubai is geared up to sell off stakes in public sector companies and offload international assets at the right time, top government officials said on Sunday.

“We are working on opening up the capital of leading companies to the public,” Shaikh Ahmed bin Saeed Al Maktoum, Chairman of the Dubai Supreme Fiscal Council, said at a news conference in Dubai.

“We continue to work to diversify our financing sources and broaden the space for participation in the wealth of our economy,” he said. “The slowdown over the last two years gave Dubai the opportunity to rethink, regroup and return to basics,” he told reporters at the Dubai Economic Update Forum.

Shaikh Ahmed, who is also the Chairman of the profit-making Emirates Group, was not very specific about the companies that would go public, but another high-ranking official hinted that Emirates airline, the Arab world’s largest and fastest growing carrier, would be a potential company to tap the capital market in future.

Shaikh Ahmed said that much progress had been made since Dubai World announced a standstill on debt repayments last year. “I am happy to report that Dubai World is now on a sound financial footing, and is fully re-focused on its core business,” he said. Shaikh Ahmed said the challenges faced by Dubai Holding were nowhere near the magnitude of what Dubai World had undergone.

Sunday’s news briefing coincided with the opening of the World Economic Forum, which is scheduled to bring academics and others from 60 countries to discuss global financial issues.

His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, was present at the news conference along with senior government officials. They included Ahmed Humaid Al Tayer, Governor of the Dubai International Financial Centre, and Mohammad Ibrahim Al Shaibani, Director-General of the Dubai Ruler’s Court.

Later, when asked by reporters whether he was hopeful over Dubai’s restructuring, Shaikh Mohammed said: “I am optimistic.”

Al Tayer said he does not foresee the need for Abu Dhabi to come to the rescue of Dubai again. “I don’t see the need for more support for Dubai,” said Al Tayer, adding, “We are not worried about debt maturing in 2011.”

Al Shaibani said Dubai is reluctant to sell its assets at present given the current market conditions. No sales are “on the cards” for domestic properties and businesses, which he described as “strategic” elements of Dubai’s long-term goals. However, when asked specifically, he said an initial public offering by Emirates “may be a reality one day, not now”.

Emirates airline, one of Dubai’s most precious and profitable assets, last month posted a four-fold first-half net profit surge to Dh3.4 billion from Dh752 million a year earlier.

Al Shaibani said some of Dubai’s international holdings could be put up for sale if commercial and property markets rebound.

The portfolios of Dubai-run companies include the Dubai World conglomerate, and such landmarks as the luxury retail Barney’s New York, a stable of high-end US hotels and stakes in Las Vegas casino operator MGM Mirage and Cirque du Soleil.

Al Shaibani estimated Dubai’s current sovereign debt at about $30 billion, and said the government is “working on bringing that debt down. He ruled out the need for a credit rating for Dubai for now. (With inputs from agencies)

issacjohn@khaleejtimes.com