Dubai: Dubai airport is going to undergo expansion plan as a top Dubai official has announced that the proceeds earned from the Sukuk (Islamic bonds) of $1.25 billion will be utilized to fund the expansion of city’s international airport.
Sheikh Ahmed bin Saeed al Maktoum, a close advisor and uncle to Dubai's ruler and a key figure in the emirate's recovery from its 2009 debt debacle, stated, "We will use proceeds from the $1.25 billion sukuk to fund Dubai International Airport expansion."
The Chairman and Chief Executive at Emirates Airline, Sheikh Ahmed, said that Dubai administration faces no problem in paying back to its creditors on time at its flagship conglomerate Dubai World.
Sheikh Ahmed seems to have charisma in his personality as he has been the public figure of Dubai in recent years. He also holds a number of top positions in the United Arab Emirates including the position of Chairman at its largest bank Emirates NBD ENBD.DU, Dubai World DBWLD.UL and at crown jewel Emirates Airline EMIRA.UL.
The UAE is getting out gradually of the terrible situation arose after 2009 debt crisis and the global markets were stunned as Dubai had announced to delay repayment on $25 billion of debt. The conglomerate agreed upon a deal in 2010 to repay lenders over five and eight years. Other state-linked firms are in the midst of restructuring debt.
"We (Dubai World) are committed to the plan set in 2010. Dubai World and its companies are making excellent revenues and we expect the debt to be paid on time. There's no need to extend debt when it falls due," said Sheikh Ahmed who is also the Head of the Supreme Fiscal Committee.
The UAE has been fast restoring its reputation which was at stake after the consequences of the debt crisis emerged in 2009. There are some factors, helping the UAE in restoring its reputation, including a boost in the industries of trade and tourism and most of all; UAE is still a safe-haven amid the rising tensions, revolutions and political turmoil in rest of the Arab world.
Dubai has established its reputation as a travel hub across the globe and rapidly expanded its Emirates Airline’s operations.
Sheikh Ahmed said that the airline, among the top 10 in the world by passenger numbers and top customer of Airbus' A380 superjumbo, is expecting better profits in 2011 as compared to those in 2010 despite the fuel cost was higher in 2011. Fuel costs were about $2 billion last year, accounting for 40 to 43 percent of the airline's costs, he added.
It was also learned that the airline has a $500 million bond maturing in June this year.
The airline’s chairman stated, "The Emirates cash reserve is good. It's excellent, I must say. We have 4 billion dirhams in cash so we are capable of paying off the debt in June...but we're still weighing options."
The investors are optimistic about the two maturities of state-linked firms this year, one is Jebel Ali Free Zone (JAFZA) and the other is DIFC Investments. The maturities are likely to repay a combined $3.25 billion this year.