Dubai World postpones payment of increasing debt

DUBAI, United Arab Emirates - A Dubai official said Friday that the Emirates provided the negative consequences of their financial problems and assured foreign creditors that the order of Dubai World to defer payment of some 60,000 million dollars of its debt was "carefully planned".
Sheikh Ahmed bin Saeed Al-Maktoum, Chairman of the Supreme Prosecutor's office in Dubai, spoke as global stock market s were stunned by the amount of unpaid incurred by Dubai World, the state administration of the city state.
Ahmed said the government of the Emirates took into account the consequences and the interests of creditors before announcing that it would seek a "stay" on payment of the debt of Dubai World, at least until May.
"Our intervention in Dubai World was carefully planned," Ahmed stressed in a statement Thursday night. "The government is leading the restructuring of this operation with the full knowledge of how markets act.
The government of Dubai, in a brief statement issued Wednesday, said he would ask the moratorium on debt repayments by Dubai World and its real estate arm of Nakheel, whose Islamic bonds by $ 3,500 million due in December
The consequences of the brief statement were instantaneous and reverberated around the world.Dubai. Crude fell to near $ 74 a barrel Friday in Asia due to the uncertainty of the financial crisis in Dubai.
"We understand the fears of the market and particularly the creditors," insisted Ahmed.
It further considered the request to freeze the finances of Dubai World a "sensible commercial decision," adding that Dubai's leadership had to intervene "given the need to take a decisive step to address the particular debt.

The announcement of the moratorium order apparently completely eclipsed the assurances made earlier by the emirate's ruler, Sheikh Mohammed bin Rashid Al Maktoum, who has consistently denied the gravity of the situation harped on about the lack of liquidity and economic plight of the city-state.
Sheikh Ahmed, who is also a member of the royal family of Dubai and Chairman of Emirates airline, insisted that the speculation that Dubai had exceeded its debt during the good times were not justified.