Officials totally reject the idea of selling assets
The multinational holding company, controlled by the ruler of the Arab state, rocked the global financial world last week in announcing that it intends holding off paying a reported $80-billion worth of debt.
The company said it was in talks with creditors to hold off loan repayments for six months.
Since then it has made no more pronouncements, sending global markets into a tailspin.
Yesterday the Dubai-based Al-Itihad newspaper quoted a company official as having "totally rejected the idea of selling some of its good investment and real estate assets at low prices".
The official said any sale needed to be done in a "commercially fair manner in order to achieve [Dubai World's] long-term strategic objectives away from ... economic pressures".
The statement did little to ease concerns as to how the company, and indeed Dubai's ruling family, plan to tackle a crisis that could destroy the reputation of Dubai Inc, as the state's government-affiliated businesses are known.
Dubai officials have headed to neighbouring Abu Dhabi to possibly discuss the debt issues with expectations that the United Arab Emirates' central bank will issue a statement today.
The company, whose holdings range from ports to real estate and include South Africa's V&A Waterfront as well as nine game reserves and lodges locally, announced it would seek, until May, a deferment on its debts and those of its real estate arm, Nakheel PJSC.
The subsidiary has a $3.5-billion bond due next month.
The announcement to restructure the company and its debts was the clearest indication yet that the conglomerate, which has been a primary engine behind Dubai's meteoric growth over the past decade, was debt-ridden.
Several ratings agencies last week said Dubai World owed creditors at least $80-billion.
The company had said it had already laid off 15% of its workforce in a bid to streamline costs.
A sale of the company's assets is one possibility being floated by analysts to cover the debts.
But the more likely scenario being discussed is that Abu Dhabi will engineer another bailout - even partial - in a bid to minimise damage to the country's banks and the economy.
Several United Arab Emirates banks are on review by international credit agencies for their exposure to Dubai World's debts.
The announcement came in tandem with another from Dubai's government that two banks majority owned by Abu Dhabi - the oil-rich home to the UAE's federal government - had fully subscribed a $5-billion bond issuance.
That issuance was part of a broader $20-billion bond programme launched earlier this year to help Dubai meet its mounting debts.
The UAE's central bank had already bought $10-billion in bonds, but officials were quick to say that the latest issuance was not linked to Dubai World's problems.
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