The shake-up of the senior management structure of Dubai World, the conglomerate restructuring US$23.5 billion (Dh86.31bn) of debt, continued with the handing over of responsibility for the developer Limitless to its sister company Nakheel. It has also appointed a new board at Economic Zones World (EZW), its free zones operator. The reorganisation follows a similar rejig at Nakheel and does not affect the terms of the financial restructuring package being put together by Dubai World. Limitless remains excluded from the financial restructuring.
The board of Nakheel, the developer of the Palm Jumeirah, will take over running Limitless "in a step aimed at setting united strategies and programmes to deal with the real estate sector", the Dubai Media Office said. It added that the move would also help take advantage of the technical and administrative personnel of Nakheel and Limitless to achieve the best result for developers, the construction sector and project investors.
Limitless's main project in the emirate was the Arabian Canal, a 75km inland waterway, which was put on hold by the financial crisis. "There is a dire need to consolidate developers and their operations to bring some balance between demand and supply," said Saud Masud, the head of property research at UBS in Dubai. "A transaction of such a nature helps with operational efficiency but unfortunately comes at the cost of jobs. It is also possible that Limitless's project activities will see a slowdown as Nakheel takes charge."
Dubai also announced the appointment of a new board at EZW, the Dubai World subsidiary that manages the Jebel Ali Free Zone and other specialist business parks in the emirate. Hisham Abdullah al Shirawi, the vice chairman of the Dubai Chamber of Commerce and Industry, was appointed the EZW chairman, the Dubai Media Office said. The Nakheel board "will work on supporting the EZW's businesses in accordance with the global and regional economic situation to further boost its interest in using the available opportunities, according to the media office," reported WAM, the state news agency.
"The board will work on developing the operations of the company, which succeeded in building a global reputation as Dubai's first economic zone, to attract foreign investments to industries and services as part of efforts to diversify the emirate's economy, increase the national income, contribute to economic development and boost foreign trade." A meeting of financial creditors in the next two weeks will consider the next stage of the debt restructuring, which has already received the approval of banks representing a majority of the liabilities.
* additional reporting by Sarmad Khan fkane@thenational.ae