Dubai World restructures

       The government conglomerate Dubai World shifted hotel and property assets, as well as executives, from developer Nakheel to its Istithmar World unit on Thursday, as part of its restructuring process.
       The conglomerate said the assets were mainly in international markets and would place Nakheel Hotels, which has properties in Asia, Europe and the United States, under Istithmar.
       Analysts said the changes - including a new chief investment officer following the departure of Istithmar's two co-chief investment officers last week - sent a comforting signal to foreign investors,worried about Istithmar's prospects.
       "The fact they have appointed a new teammeans that this vehicle is continuing," said Mohammed Yasin, chief executive of Shuaa Securities.
       "They will have new objectives to try to arrange refinancing for investments,to refinance the leverage and maybe try to recoup as much as can be from some of those investments that were done."
       There had been speculation that Istithmar, the investment arm of the Dubai government and owner of US luxury retailer Barneys New York, may be facing difficulties.
       It hired an advisory firm in August to help it mull options to shore up Barneys'financial position and a media report last week said Istithmar is freezing investments as part of a restructuring that may result in the sale of the fund or its assets.
       Dubai World said in its statement on Thursday that the changes were "part of an ongoing organisational operational restructuring process within the group."
       The media report also said its chief executive's job was under review. In a statement last week, Istithmar said chief executive David Jackson's job was safe,but did not comment on the rest of the report.
       "There was a widening opinion that Istithmar World was potentially being wound down, but this contradicts that opinion," said Fahd Iqbal, vice-president of research at EFG-Hermes.
       Dubai World named Andy Watson as chief investment officer of Istithmar World and Binod Narasimhan as chief financial officer, from developer Nakheel and Nakheel Hotels, respectively.
       It also appointed Sandesh Pandhare,who already worked at Istithmar, as managing director, private equity at the investment arm.
       Hamza Mustafa was appointed managing director, real estate. He was formerly general manager of Nakheel's The World project, a series of man-made islands shaped like a map of the world.
       Dubai World, which also owns port operator DP World, also said Joe Sita,chief executive of Nakheel Hotels, had left the company.
       Istithmar is one of the flagship companies of state-owned Dubai World,which has been hit hard by the global financial crisis. Its real estate unit Nakheel, famous for developing man-made islands shaped like palms, is being closely watched for its ability to refinance $3.52 billion of Islamic bonds, maturing in December.
       Dubai World has $59 billion of liabilities, a large proportion of the Gulf emirate's total debt.
       "They keep on giving these ad hoc restructuring announcements ... this is all good, but how does it actually repay their debt?" said Abdul Kadir Hussain,chief executive at Mashreq Capital.
       Hussain said the move could be a precursor to selling some of the hotel assets but there was little clarity on plans.
       "If this transfer of assets is part of an overall strategy then great, as long as the end result is a less leveraged, less risky company."
       Nakheel Hotels, which include the Mandarin Oriental and W hotels in New York and Corinthia Metropole in London,bought luxury liner Queen Elizabeth 2 in 2007 with plans to convert it into a luxury hotel, off one of its palm islands.
       In July, the company said it was mulling moving the ship from the emirate to another location in the region or Africa.