Deserted debts stir disquiet in the mysterious world of Dubai Inc

Dubai’s debts have always been something of a mystery for investors but since the coronavirus pandemic hit its economy, things have got hazier, some say. Over the past 12 months, two firms with links to Dubai’s government and its ruler, respectively, have said they would not meet hundreds of millions of dollars’ worth of debt repayments, a rare step in the Middle Eastern business hub, where debts are typically renegotiated and state support is often seen as implicit. One of the firms, Dubai Holding, the investment vehicle of Sheikh Mohammed bin Rashid al-Maktoum, Dubai’s ruler, told creditors that it would not service a $1.2b loan owed by its subsidiary Dubai Holding Investments Group and was prepared to pursue liquidation for the unit, according to a source and a document sent to investors in December and reviewed by Reuters.The second firm, state-owned property developer Limitless, told creditors last March it wasn’t able to meet payments for a loan worth about $1.2b, according to a company document. It has since been seeking to restructure the debt. Some investors have been working off the basis that there was an implicit government guarantee, two bankers said, a sentiment reinforced by Dubai’s support for Emirates Group, the state-owned airline, during the coronavirus crisis.<br/>