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Sheikh hits out at the reaction to Dubai crisis

THE RULER of Dubai yesterday slammed the reaction of international investors to the emirate&rsquo;s debt crisis, claiming: &ldquo;They do not understand anything.&rdquo;<br /><br />A day after the finance minister said the government would not back debt-laden Dubai World, Sheikh Mohammed bin Rashid al-Maktoum defiantly said: &ldquo;We are strong and persistent. It is the fruit-bearing tree that becomes the target of (stone) throwers.&rdquo;<br /><br />His comments came shortly after Sheikh Khalifa bin Zayed al-Nahayan, President of the United Arab Emirates and the ruler of Abu Dhabi, said the UAE economy was in good condition, after Dubai World rocked world markets by asking for a freeze on its debt repayments last week.<br /><br />Dubai World issued a statement yesterday for the first time with detailed plans for its debt obligations. The company said it was in constructive talks with creditors about restructuring $26bn of its $59bn debt pile.<br /><br />Bondholders and creditors have clubbed together to form a series of ad-hoc representative groups amid concerns that a six month standstill could lead to a much more radical restructuring. They are understood to be trying to ensure they have enough representation to veto any move they disagree with.<br /><br />The restructuring will only relate to certain subsidiaries, including Limitless Worlds and Nakheel, the troubled property company responsible for the emirate&rsquo;s palm-shaped islands. Some $6bn of the debt relates to Nakheel.<br /><br />DP World, P&amp;O Ferries, Jebel Ali Free Zone and the Istithmar investment fund are excluded from the current process and Dubai World said these businesses remained on a &ldquo;stable financial footing&rdquo;.<br /><br />The statement helped markets in London, where the FTSE closed 121.49 points higher at 5312.17. But Dubai closed down 5.61 per cent and Abu Dhabi fell 3.57 per cent.