Saturday, Nov 28, 2009

Gordon thinks it is a local problem!

Mail online: UK banks and jobs at risk from Dubai domino effect

Meanwhile, question marks hang over the fate of thousands of Britons employed by companies under Dubai's control. The emirate's investment vehicles hold interests in Alton Towers, the London Eye, P&O, hotel chain Travelodge, and the London Stock Exchange.

Posted by waitingtobuy @ 01:07 PM (1569 views)
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8 Comments

1. drewster said...

It's not just banks who are on the hook for Dubai debt. Many UK companies do business with Dubai, whether in construction or consulting. Late payment is already a common feature of business in Dubai, this is only going to make things worse for those companies.

Consider this article from last year:

New Civil Engineer: Dubai clients pay late (15/10/2008)
Consultants in Dubai are being paid as much as 18 months late, firms in the region said this week.
"The agreed payment terms with most clients is 45 days but the usual payment period is six to nine months," said a board director of one of the UK’s top consultants.
Consultants working in neighbouring Abu Dhabi said that late payment is not an issue there.

Those consultants will have covered their cashflow with loans from global banks, many UK-based. There are no figures available for how much money is awaiting payment from Dubai.

Saturday, November 28, 2009 01:33PM Report Comment
 

2. mark said...

I wonder how the bailiffs would go about repossessing a whole country?

Saturday, November 28, 2009 02:04PM Report Comment
 

3. matt_the_hat said...

When I heard someone sold sand to the arabs because they didn't have the right stuff to make their sand castles in the sea - I knew it was going to end in tears

Saturday, November 28, 2009 02:14PM Report Comment
 

4. alan said...

OK, we need the Stock Exchange but if you closed the rest tomorrow it wouldn't exactly stop the UK from functioning, would it?

Could the UK be next...? I doubt it, we are only talking short term debt default in Dubai.

Worst ways the BoE could make another "secret" loan. Anyway, we won't find out for another year because our politicians in Westminster tell us what they want us to hear....

Saturday, November 28, 2009 03:36PM Report Comment
 

5. icarus said...

mark @2 - with difficulty. Occupants of those tall buildings could pour a lot of boiling oil from a great height on anybody bent on repossession.

Most of the Dubai debt is of fairly long maturity, so creditor banks could just carry on with their 'extend and pretend' (or 'delay and pray') tactics, which they have perfected over the past two years.

Wonder what Abu Dhabi's game plan is? Buy the assets in the firesale and rein in the Maktoums?

Saturday, November 28, 2009 05:25PM Report Comment
 

6. Cheekie Charlie said...

Wasn't the Sub-Prime a local problem!

Saturday, November 28, 2009 09:40PM Report Comment
 

7. drewster said...

Further to my comment #1, here's more bad news about British companies' exposure to Dubai:

Times: Dubai owes British builders £250m amid debt crisis
The Association for Consultancy and Engineering estimates Dubai’s main arbitration body is struggling to process almost £3 billion of disputes from firms across the globe that have not been paid in full.
Consultants concede privately that payment periods for invoices have doubled in the past year and firms have been offered as little as 60p in the pound for what they are owed.

Saturday, November 28, 2009 09:44PM Report Comment
 

8. This comment has been removed as it was found to be in breach of our Blog Policies.

 

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