Cruise Liner QE2 on Sale

PR Log (Press Release) – Feb 09, 2010 – Dubai World is putting the iconic cruise liner QE2 up for sale, as well as host of other interests including circus troupe Cirque du Soleil, as it grapples to cut its $22bn debt mountain.

Last week the conglomerate’s investment subsidy, Istithmar, started proceedings with the sale of a 13 percent stake in Indian domestic airline SpiceJet.

It has also entered into talks to sell Inchcape Shipping Services, the UK port agent, with an estimated $700m price tag.

Other interests likely to be offloaded include stakes in Standard Chartered Bank, Gulf Stream Asset Management and EMPG.

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Dubai World built up worldwide portfolio of assets during the Noughties, including a large property empire. The acquisitions were made using part of its own equity as well as large debt from international banks.

But last November, it announced that it was seeking to delay debt-servicing payments as it looked to undertake a capital refinancing.

Since then Dubai World has received about $6.2bn in emergency funding from the Dubai Financial Support Fund (DFSF).

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But there is growing concern among other banks that the DFSF will be made a preferential creditor, thereby jeopardising their willing to extend credit facilities to Dubai World.

It is understood that Dubai World will look to sell its assets individually rather than as a portfolio.

The QE2 cruise liner could be sold off as its Dubai owner looks to ease its debt mountain, it has been reported.

State-backed investment firm Dubai World plans to sell a raft of assets - including the luxury liner - owned by its private equity arm Istithmar, according to the Sunday Times.

Dubai World is laden with debts of £14 billion and sent shockwaves through global markets last November when it asked to delay repayments to around 100 banks while it attempted to tackle its finances.

Istithmar bought the QE2 from Cunard in 2007 for 100 million US dollars (£64 million) amid plans at the time to transform it into a luxury floating hotel.

The liner, which was launched by the Queen in September 1967, was the longest-serving ship in Cunard's 168-year history. It crossed the Atlantic more than 800 times and carried more than 2.5 million passengers.

Other trophy assets on the block could also include the Canadian circus group Cirque du Soleil.

Advisers to Dubai World led by accountancy firm Deloitte are expected to present the plans for asset sales to creditors led by banks Royal Bank of Scotland, HSBC and Lloyds Banking Group in the coming months, the report said.

Alongside Istithmar's assets, Dubai World's interests range from Scotland's historic Turnberry golf course to a series of UK ports through its acquisition of P&O in 2006.

The company also owns Nakheel, which is behind Dubai's lavish Palm man-made island developments - although the expansion was fuelled by cheap debt and the emirate has since run into trouble.

In December Dubai received a £6 billion handout from oil-rich neighbour Abu Dhabi to help meet its obligations while it secures its financial future. Dubai World was unavailable for comment.

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