By Adam Schreck/ AP
DUBAI: Dubai’s ruler has replaced the longtime head of Dubai World with the chief of Emirates airline, turning to one of his closest confidants to lead the turnaround of the debt-laden conglomerate.
Sheik Ahmed bin Saeed Al Maktoum was named chairman of the sprawling company, whose holdings include seaports, hotels and high-end retailer Barneys New York, in a decree carried Sunday evening by state news agency WAM. He is an uncle and top aide of Dubai’s hereditary ruler.
Sheik Ahmed replaces as chairman Sultan Ahmed bin Sulayem, who spearheaded Dubai World’s supercharged growth but also oversaw the accumulation of what turned out to be unmanageable levels of debt.
During his tenure, bin Sulayem grew Dubai World’s port business into the world’s fourth biggest. He oversaw the construction of islands shaped like palm trees and a map of the world in Dubai, as well as overseas investments that included US hotels, a stake in Cirque du Soleil and half of a mammoth real estate project on the Las Vegas Strip.
The order reshuffled the rest of the conglomerate’s board too, giving seats to other top lieutenants of Dubai’s ruler, Sheik Mohammed bin Rashid Al Maktoum, who have been charged with cleaning up Dubai’s fiscal problems.
Among them are Mohammed Al-Shaibani, director of the Ruler’s Court, the seat of executive power in the emirate, and Ahmed Humaid Al-Tayer, who heads the Dubai International Financial Center banking hub.
Sheik Ahmed’s appointment will give Dubai World a leader with a track record of running a profitable business.
He is best known as the chairman and CEO of Emirates, the city-state’s rapidly expanding international airline, which recently pulled in $925 million in first-half profits.
The carrier said his role there will remain unchanged but declined to comment further on the Dubai World appointment.
Sheik Ahmed is also president of Dubai’s civil aviation department, and he chairs a government committee set up to oversee Dubai World in the wake of the emirate’s financial crisis.
“Sheik Ahmed brings in years of experience, (a) great track record and a lot of credibility running Emirates Group,” said Haissam Arabi, chief executive of Gulfmena Alternative Investments, a fund management firm in Dubai. He said the move was good news for Dubai World’s creditors.
Dubai World is at the center of the emirate’s financial troubles, which erupted late last year when the conglomerate called for new terms on billions of dollars of debt it owed. The surprise announcement and the uncertainty that followed rattled markets the world over.
The company has taken steps since to get its finances in order. It won full support from creditors for a $24.9 billion debt restructuring in October following months of negotiations.
Its subsidiary Nakheel, the property developer that spent billions to build Dubai’s manmade islands, is in separate talks to re-negotiate terms on at least $10.5 billion in debt it owes.
The International Monetary Fund estimated earlier this year that Dubai and its many state-linked companies owe as much as $109 billion.
Dubai officials said recently the emirate is considering selling more assets and offering shares in state-run companies to raise cash.
Dubai World’s new board will have the power to approve asset sales, including real estate, stocks, bonds and other holdings, according to the decree.