North Africa/Middle East

Several Dubai-based contractors say they are owed millions of dirhams by state-linked developers and some may face bankruptcy as credit dries up and major projects are cancelled or scaled back in the former Gulf Arab boom town, Reuters reported. "There has been a marked increase in the number of contractors asking for help to obtain payment, including payments certified months ago on some of Dubai's largest projects," Michael Grose, a partner at legal firm Clyde & Co LLP, in the Middle East Projects and Construction Group, told Reuters.

The board of Vita-Galilee Fruit Ltd. (Vita-Pri Galil) filed with the Haifa District Court an objection to receivership and foreclosure of the liens filed by Bank Leumi and Israel Discount Bank, Globes Online reported. The company and its subsidiaries will also convene shareholders and creditors' meetings to submit to them a recovery plan. Vita entered into receivership when Bank Leumi and Discount Bank refused to again postpone repayment of the company's debts. On Friday, receivers were appointed to the company after Bank Leumi and Discount Bank filed an ex parte request with the court.

Global Investment House (GIH), the largest investment bank in Kuwait, has been downgraded to a notch above default by Fitch Ratings after the bank warned it may default on a loan, The National reported. The rerating to a ‘C’ came after GIH told Fitch that it is unable to repay a loan which matured yesterday. The company has a grace period of 72 hours to meet the obligation before defaulting. The downgrade followed the announcement from GIH earlier this month that it was seeking US$1 billion (Dh3.67 billion) from local banks.

Ecuador’s government is considering various ways of repudiating its debt and will ask for loans from friendly governments like Iran should it lose access to credit markets, the country’s finance minister Maria Elsa Viteri said. Ecuador has threatened to default on $3.9 billion in bonds because it says a government-commissioned audit found evidence of criminal violations in connection with its issuance, Bloomberg reported. The government skipped a $30.6 million bond payment on Nov. 15, invoking a 30-day grace period.

Russian stocks plunged and Kuwait suspended trading as a slump in oil to below $55 a barrel roiled emerging markets and increased concern that Moscow will be forced to devalue the ruble, Bloomberg reported today. Russia's Micex Index fell as much as 17 percent and was 8.6 percent lower at 1:09 p.m. in Moscow after it reopened following a 30-minute trading suspension. A court in Kuwait ordered a shutdown as traders lobbied for support after a sixth day of declines.

According to Abu Dhabi Commercial Bank CEO Eirvin Knox, Abu Dhabi won't allow Dubai's state-owned companies to default on debt payments as the global banking crisis limits their access to funds, Bloomberg reported yesterday. Dubai may need help from Abu Dhabi and the United Arab Emirates government to finance a surge in borrowing that paid for the world's tallest tower, palm tree-shaped man-made islands and stakes in banks worldwide, Moody's Investors Service said in a report last month.

The International Monetary Fund has “record levels of liquidity” to combat the global economic crisis and debate over new ways of supplementing its coffers was not “today’s problem”, according to John Lipsky, IMF first deputy director. With the Fund facing unprecedented calls on its resources, some policymakers have raised concerns about its continued capacity to react to demands such as its $16.5 billion loan to Ukraine and $2 billion loan to Iceland, the Financial Times reported yesterday.