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Business: Abu Dhabi Eyes Stake In Emirates For Bailout Cash

Discussion in 'Dubai property' started by memo123, Nov 30, 2008.

  1. memo123

    memo123 Member

    feast your eyes. This is for all the people who are saying dont panic

    this article is in he ZAWYA, MIDDLE EAST BUSINESS INFORMATON


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    "Control of Dubai's prestigious national airline, EmiratesEmirates, has been named by Abu Dhabi in return for a massive cash bailout of the kingdom

    By DOMINIC RUSHE and IAIN DEY

    ABU DHABI has demanded control of EmiratesEmirates, Dubai's flagship airline, as the price of a multi-billion pound cash injection for the Gulf kingdom.

    The fast-growing airline, long the envy of neighbouring Arab states, has emerged in recent days as the centrepiece of negotiations over a financial bailout for cash-strapped Dubai.

    The emirate, which is ruled by the Al Maktoum family, has been hit hard by the credit crunch. Its property market, in which many of the big players are state-owned or backed, has enjoyed explosive growth over the last decade but prices are now tumbling, leaving heavily indebted developers badly exposed.

    Government sources in Dubai confirmed last week that talks had begun with Abu Dhabi, which has huge oil and gas reserves, about funding. Rather than ploughing cash into the Dubai state, Abu Dhabi has offered to invest in its neighbour's strategic assets.

    The Sunday Times has learnt that Abu Dhabi is eyeing a stake in EmiratesEmirates, along with investments in other industries, such as the state water company.

    The airline alone is estimated to be worth about pounds 10billion and selling a stake in it could generate enough cash to prop up much of Dubai's economy.

    The proposal is controversial, however, as the airline is regarded as the embodiment of Dubai's rapid rise to international prominence and an important symbol of the emirate's identity. It is owned by the Dubai government, which is reluctant to relinquish control.

    Although other Gulf states are thought to be monitoring the situation, Abu Dhabi is believed to be keen to offer Dubai a deal that keeps the airline within the United Arab EmiratesEmirates.

    Transport bankers say Abu Dhabi may plan to pursue EmiratesEmirates' nascent plans for a float on the Dubai Stock Exchange. The airline's management, and Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive of EmiratesEmirates Group, recently hinted the government would consider a listing, with 25 per cent-30 per cent of the airline's equity sold. Last year the group had net profits of pounds 690m.

    Airlines have long been a contentious issue in the United Arab EmiratesEmirates, a confederation of Gulf states that includes Abu Dhabi and Dubai. In the 1970s the two states, along with Oman and Bahrain, took strategic stakes in Gulf Air, intending to turn it into a national carrier for the region.

    By 1985, however, Dubai had decided to set up a rival and created EmiratesEmirates, backing a largely expatriate management led by Briton Maurice Flanagan.

    EmiratesEmirates has been a success story of international aviation, turning Dubai into one of the largest hubs, and in the process helping the government fulfil its ambition of growing tourism and financial services. Abu Dhabi followed Dubai's example, setting up its own national carrier, Etihad, in July 2003.

    COPYRIGHT - THE SUNDAY TIMES, LONDON "


    So please when other people write their opinion dont just mock them
    Regards
     
  2. georgihh

    georgihh New Member

    Not only the Emirates
    Abu Dhabi Eyes also -the airport, the free zone, DEWA, and few more profitable organizations.
    100 billion $ are needed in Dubai.
    Apart from Abu Dhabi being more stingy and conservative doesn’t matter who owns the above institutions.
    What matters is the cash will come to Dubai and business will back to usual
     
  3. PropGuy

    PropGuy New Member

    Abu Dhabi is trying to cash the situation, they just don't want to hand a loan, they want to share profits. Very smart move by Abu Dhabi.
     
  4. monsi

    monsi New Member

    Thank you for posting this, but did you post it thinking it was a negative?

    If Abu Dhabi did not think Dubai was worth the investment and things were going to go belly-up they would not be considering this.

    I still think the recent shock to Dubai's 'powers that be' is to the long-term good of the emirate.

    I don't think people have been saying nothing has happened, most sane people with no negative agenda are simply saying stay calm.
     
  5. TommyC

    TommyC New Member

    Belly-up would probably be going a few steps to far, but whatever comes out of it might not be the initial idea they had in mind but rather an adjusted idea planted more firmly in reality, backed up with the appropiate funds and less speculation. A merger between Etihad and Emirates makes perfect sense to me, as well as the new airport as a joint venture between Dubai and Abu Dhabi. Considering the size and projected amount of passengers they are hoping to have passing through I have trouble seeing it work out without cooperation in the long run.

    Regarding the idea of Dubai going belly-up, it's likely I think that the initial idea may. But it's a fact that Dubai has made a lot of people in the world aware of the "brand" Dubai, the name itself has a value which might be worth investing in if you have the cash. It has happened a lot of times in history that competitors have bought better recognised competitors simply for the brand rather than the succesful business.
     
  6. Wannaberich

    Wannaberich New Member

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