RRJ 4

Reference:

Lyon, A. (2009, December 2). “Dubai World to meet creditor panel on debt crisis”. Reuters.

Retrieved December 3, 2009, from http://www.reuters.com/article/ousiv/idUSTRE5B129120091202?

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Summary:

According to the article, Dubai world creditors are going to meet and discuss with the company to delay their payments. People have some concerns of a new economic problem. Next week’s meeting is the first meeting with the main creditors to deal with the new problems. One of Abu Dhabi’s banks’ executive said that the six from the United Kingdom banks are on the creditors panel with two Emirate banks. Dubai world asked their creditors to stand still on debt to their three property subsidiaries. The most important question now is what will happen to Nakheel bond, which matures on December 14. Dubai said that the government is not going to guarantee Dubai world liabilities. The United Emirates blamed the international media for exaggerating the crisis and for ignoring that it was the national day. Some international banks gave Dubai companies and they made a deal that these companies are going to be protected by the government, which made international investors upset because it is not ethical. Adnan Yousef who is the chairman of the Union of Arab Banks, blamed Dubai for their bad communication with creditors. He also said, that they did not have a committee to contact each creditor. Then, he said that probably the crisis would not have a big impact on the gulf banks.

Response:

I did not like the article for one main reason. This kind of articles sometimes affect the stock market in the world, so I think these information must stay away from the media. In the gulf area we know that Dubai is having a lot of financial problems. On the other hand, we are sure that what happened last year is not going to happen again in a few years, because the economy is going to be better by time. The idea of a company protected by a government does not sound good to me, but in Saudi Arabia we have the biggest oil company in the world, which is called Saudi Aramco; the government protects this company because it is getting a huge income. I disagree with the chairman of the Union of Arab banks because the creditors are responsible, not the lenders.