QE2 for sale – shock revelation

Feb 09, 2010
Author: Terry Hutson

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Ship enthusiasts will be calling for more than a double gin and tonic after hearing that the debt-laden Dubai World group is preparing a ‘firesale’ of some of its most prestigious assets that includes the cruise liner QE2.”

“There are a number of options being considered for QE2. Istithmar World is considering which option will best maximise value of the vessel,” a Istithmar spokesperson said in a statement on Monday.

One of the other assets reported to be for sale is the Canadian circus group Cirque du Soleil.

The crisis around Dubai World and Istithmar World broke last November when the state-owned group announced it was seeking to delay debt-servicing payments and would be requiring capital refinancing.

Since then it has been learned that Dubai World is having to offload assets as it restructures debt worth USD22 billion. According to the Middle East publication Maktoob Business, while the company has ring-fenced prized possessions such as DP World, it could end up selling other assets including troubled property subsidiaries Nakheel and Limitless.

Among the property assets held by Nakheel is Cape Town’s V&A Waterfront.

Last week Istithmar, the investment arm of Dubai World, revealed that it was in talks to sell Inchcape Shipping Services, the internationally-known UK-based agent. Reports say that Bank of America Merrill Lynch and Royal Bank of Scotland are advising Istithmar on the sale of Inchcape, which has about 245 offices in 63 countries.

Inchcape is one of Istithmar’s few successful investments. Between 2006 and 2008 Istithmar went on a leverage-fuelled buying spree, snapping up brand names from around the world. These included investments in Standard Chartered Bank, which in turn is one of Dubai World’s main creditors.

A number of private equity firms are reported to be preparing to bid on Inchcape. These include the US companies Advent International, TPG Capital and Kohlberg Kravis Roberts, along with Cinven, Charterhouse Capital Partners and Montagu Private Equity from the UK.

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


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