The problem with this thesis is that if it were to occur, Dubai would be likely to receive much less than what it paid for the assets. Given the use of leverage, particularly at Istithmar, that could lead to insufficient proceeds to repay debt.
Some fire sales may be needed now to raise a bit of cash and to demonstrate to banks that they are serious. But I don't think they're going to have to sell everything.
I'd expect that if a credible case can be made for a bit of patience on any asset disposal, banks would be willing to listen. As long as the period is reasonable. That is, a measured sale of certain assets targeted to occur after asset values have recovered.
Dubai Inc has a lot going for it in its negotiations. The government link, the prospects for future transactions. This is not some small borrower that the banks will want to extinguish to get their money back.
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