Dubai Debt Crisis

Dubai World, a state run subsidiary investment company asked its creditors if it can delay its payments by 6 months. Dubai World is a major investment company in the region which has undertaken a lot of development projects. It has exposure to $59bn debt. It revealed that it was not in a position to honor $3.5bn payment commitments due in December this year.

Most of the markets across the globe plunged on account of potential default of the company. There are concerns that it could be a blow to the world’s recession recovering markets. Most of the countries have exposure to Dubai and worried about undisclosed debts.

FTSE (UK Index) tumbled down more than 170 points 26th November 2009. Other European indices were down as the car companies in the region are partly owned by Mutual Funds from UAE. Sensex lost nearly 570 points in 2 days.