The decision by Dubai's government-owned investment company to ask for a sixth-month delay on repaying its debts hits Asian and European stock market prices.Dubai World, which has nearly $60bn in debt has asked creditors if it can postpone its payments until at least next May. Dubai is famed for its sprawling man-made islands, indoor ski slopes and world's tallest tower, but it has been hit hard by the global credit crunch and recession.
Property prices in Dubai have slumped by around 50 per cent within the last year. Lay-offs, prompted in part by project cancellations and delays, have forced many expatriates out of the city.
Dubai is one of seven self-governing emirates or states that make up the United Arab Emirates and one of the key forces behind the growth of the city-state. It has had to rely on trade, finance and tourism to compensate for its lack of oil wealth.
The conglomerate, whose businesses range from hauling cargo off ships to building islands and running US luxury hotels, announced in October that it has had reduce its work force by 15 per cent.
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