New board on mission to reshape Dubai World

Dubai World's new board of directors met for the first time yesterday to begin reconfiguring the government-owned company after a US$24.9 billion (Dh91.45bn) debt restructuring pact this year.

Last week, Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, appointed Sheikh Ahmed bin Saeed Al Maktoum as chairman, replacing Sultan bin Sulayem, who had chaired the board since the company's inception in 2006.

"The meeting reviewed a plan for the company's next phases, and Sheikh Ahmed bin Saeed confirmed the board's commitment to implement a programme that strengthens the performance of the company and its subsidiaries based on accurate scientific data," the Government said in an e-mailed statement.

Dubai World reached agreement in September on its debt restructuring, paving the way for the new board and a new plan to take the company forward.

The conglomerate owns some of Dubai's most treasured assets, including the global ports operator DP World. Through its private-equity subsidiary, Istithmar World, it also owns stakes in the US discount retailer Loehmann's, the luxury clothier Barneys New York and part of the Canadian entertainment company Cirque du Soleil.

While the debt restructuring agreement has brought a measure of calm to regional markets and helped ease Dubai's sale in late September of $1.25bn of government bonds, some subsidiaries are still working through financial troubles. Loehmann's, for example, is in bankruptcy proceedings in the US, and Nakheel, the Dubai World-owned developer responsible for the emirate's palm-shaped islands, has yet to reach a final agreement with contractors to settle unpaid bills.

The Government said yesterday the new programme for Dubai World "should ensure its financial position and enable it to fulfil contractual and financial obligations as well as develop other potentials and to support areas for improvement".

Representatives of Dubai World could not be reached for comment.

According to the Government statement, the new board of directors is charged with overseeing the company's restructuring and "drawing up and supervising the implementation of the general policy of the company and its subsidiaries".

The board will also look at the value of Dubai World's investments and review reports about the company's accounts and its financial position.

Dubai World was a "solid pillar of the national economic system", the statement said, adding that the board was there to help undergird its position as a leading local company.

Dubai World accounts for a large slice of overall debts of the emirate and its government-linked companies, estimated this year by the IMF at more than $100bn.

Like many of its peers in Dubai, the company took advantage of an unprecedented boom in global credit markets to expand rapidly, only to face problems repaying loans and bonds when the financial crisis hit. Numerous divisions of Dubai Holding, a group owned directly by Sheikh Mohammed, are also seeking new terms on debt.

Dubai International Capital, Dubai Holding's private-equity arm, reached a deal at the end of last week to restructure debts of $2.6bn.

afitch@thenational.ae