12/20/2010 (9:40 pm)

Dubai denies plan to offload London exchange stake

Filed under: Loans, technology |

A top Dubai fiscal official on Monday tamped down rumors the city-state was close to selling prized financial assets, including its stake in the London Stock Exchange.

The denial from the governor of the sheikdom’s international banking center was in response to an unsourced story in Britain’s Sunday Times, which reported that the emirate’s oil-rich neighbor Abu Dhabi was seeking to take control of core Dubai financial holdings for $1.5 billion.

Just last week Borse Dubai, the state-owned company that owns a fifth of the London exchange, halved its stake in trans-Atlantic exchange operator Nasdaq OMX Group Inc. to help cover a $2.45 billion loan coming due in February.

Dubai International Financial Center governor Ahmed al-Tayer “categorically denied” reports that the emirate had received bids for any of its other financial assets, according to a statement issued late Monday by Dubai’s media office.

It added that he “emphasized that the Borse Dubai was currently not looking to dispose of its investment” in the London Stock Exchange.

A London Stock Exchange spokeswoman declined to comment.

Earlier in the day, the new board of indebted state conglomerate Dubai World met for the first time since a shakeup of the company’s leadership last week.

The man picked as Dubai World’s new chairman in the reshuffle, Sheik Ahmed bin Saeed Al Maktoum, underscored the company’s commitment to repaying its creditors.

“Sheik Ahmed emphasized adopting a strategy that aims at optimizing Dubai World’s performance along with that of its related companies, and fortifying its financial position, which in turn will enable the company to meet its financial and contractual commitments,” a Dubai media office statement said.

The new chairman, a top aide and uncle of Dubai’s hereditary ruler, also runs the city-state’s airline Emirates.

Dubai World, whose holdings include seaports, Las Vegas real estate and high-end retailer Barneys New York, earlier this year got creditors to agree to new terms on repaying $24.9 billion of debt. Its Nakheel property subsidiary is still working on securing a similar deal for at least $10.5 billion in debt it owes.

The International Monetary Fund estimates Dubai and its many state-linked companies owe as much as $109 billion.

A number of government-linked firms have begun shedding assets to raise cash, but Dubai is reluctant to lose control of investments in core hometown industries like tourism, shipping and finance.

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