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JER
Dec. 5, 2009, 12:12 AM
From the Financial Times: Dubai ruler’s racehorse buying spree falters (http://www.ft.com/cms/s/0/0becd00a-e0f8-11de-af7a-00144feab49a.html)

The FT has been giving lots of good coverage to the financial turmoil in Dubai, probably due to the extensive British interests there.

Of course, the Maktoums are denying that their absence of buying at Tattersalls and Keeneland had anything to do with Dubai's fragile finances.

It's a nice piece from the non-racing press; the FT also did a nice job writing about NH trainer David Pipes's yard a couple of weeks ago.

(The FT may make you register to read. Sorry if it's behind the wall.)

Glimmerglass
Dec. 5, 2009, 01:04 AM
Beyond just the propping up of the assorted horse sales with auction purchases - sustained for now - are other depended upon revenue streams tied to other Dubai entities and player. For example a very significant amount of support for horse tv broadcast in the US and the Breeders' Cup comes from Emirates Airlines.

The Guardian suggested the Dubai gov't might use the carrier as debt collateral (http://www.guardian.co.uk/business/2009/nov/30/emirates-airline-collateral-dubai-debt) which is fine for the moment. However the carrier - which does make a modest profit - has tremendous debt obligations not too far on the horizon.

FT 12-4-09 "Emirates Airlines upbeat over debt repayment" (http://www.ft.com/cms/s/0/77005e72-e038-11de-8494-00144feab49a.html)


The airline has bonds of $1.7bn maturing by 2013, according to Standard & Poor’s. Financiers are worried that Dubai World’s call for a debt standstill could make it harder for other Dubai entities to raise finance.

The carrier is on track to earn a profit for the entire 2009 of around $400MUS - which is positve but I'd expect traffic to Dubai, for example, to shrink in 2010 and with it earnings too.

Emirates currently operates a fleet of 139 aircraft. Its order-book stands at 156 aircraft, with a total value of approximately $50 billion. It's the largest customer for the giant Airbus A380 passenger plane.

(By comparison Dubai's total debt, including the obligations of its government companies, is now estimated at about $100 billion which has put the country in a complete tailspin. Add these fleet purchases to that and the problem seemingly is just expanded .... )

summerhorse
Dec. 5, 2009, 08:25 PM
Well they could always SELL some horses I guess...

Calamber
Dec. 7, 2009, 10:41 AM
And farms, and ....etc.

Glimmerglass
Dec. 7, 2009, 11:24 AM
And farms, and ....etc.

True but in reality most of those purchases add up to just pin money and almost certainly they couldn't be unloaded to break even let alone make money.

I wouldn't say the sky is falling and everything must go. However I think the lavish spending will need to be curtailed and that will have some degree of a ripple effect.