Dubai World borrowed billions of dollars to acquire some of the most high-profile commercial developments in the United States in recent years, and it could be forced to sell them at a loss if the Persian Gulf conglomerate can't restructure its debts.
Dubai World said last week it would seek a six-month delay in paying creditors on nearly $60 billion it owes. The desert emirate racked up the debt during its own real estate bubble that popped with the global recession.
Among Dubai World's U.S. assets are several luxury hotels - a sector that has been one of the hardest hit by the fallout from rising unemployment and plunging real estate values this year.
One of Dubai World's biggest units, Istithmar World, spearheaded the holding company's acquisition of the Mandarin Oriental, New York, for about $380 million in 2007, and a 50 percent stake in the Fontainebleau Miami Beach for about $375 million last year.
The Fontainebleau is struggling with financing woes of its own, stemming from a $660 million loan that was due in August. Contractors also claim the historic hotel owes them $60 million.
Dubai World also bought the CityCenter Casino & Resort in Las Vegas for about $5.4 billion. The development, a joint venture with MGM Mirage, is slated to open doors on Tuesday and officials have said Dubai World's debt woes will not derail plans to finish the project.
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Source - AP
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