Friday, Sep 18, 2009
Gulf News
Dubai: Four executives of developer Nakheel are being transferred to Istithmar World as part of what Dubai World terms an ongoing organisational restructuring process within the group.
Restructuring will occur in selected hotel and real estate assets and the related management teams, primarily in international markets, with staff transferring to Istithmar World.
Hamza Mustafa will join Istithmar World as managing director of real estate and will hold responsibility for the hotels and commercial buildings also transferred to Istithmar World.
Other executives to be transferred from Nakheel to Istithmar World are Andy Watson as chief investment officer, Binod Narasimhan as chief financial officer and Sandesh Pandhare as managing director of private equity.
David Jackson remains chief executive of Istithmar World. Joe Sita, former chief executive of Nakheel hotels, has left the company altogether.
Analysts say that although the details are limited, it would appear that the restructuring is a sign that Nakheel is trying its dig itself out of the dismal situation it has been in for the past year.
While the situation is not crystal clear, it seems "odd" to transfer assets that are currently a source of recurring cash flows for Nakheel, such as rental and hotel assets, said one analyst requesting anonymity.
Other analysts, however, say the restructuring is simply part of a global trend towards greater transparency.
Blair Hagkull, managing director Middle East and North Africa, Jones Lang LaSalle, told Gulf News that "restructuring is about looking for clarity, direction and optimising real estate assets. Fundamentally, this is the lack of available pre-sale funding that has required developers, not just here but globally, to look at their funding business model. This is very much part of a much larger global trend - how to best optimise in the current market conditions".
Dubai World is attempting to reorganise its business units as it grapples with debt - almost $60 billion of total liabilities, the company said earlier. Nakheel is also struggling with the burden of repaying a $3.5 billion Islamic bond due in December.
Established in 2003, Istithmar World is an investment arm of Dubai World.
Istithmar World has a broad portfolio of successful firms in markets ranging from North America and Europe to Asia and the Middle East, as well as across a variety of sectors ranging from consumer, industrial, financial services, aviation and natural resources.
By Suzanne Fenton, Staff Reporter
Gulf News 2009. All rights reserved.
