Last week in this column, I looked at how Dubai had come through a tricky 2010, dominated by creditor negotiations and debt management.
Now is the time to look forward and try to forecast what the current year might bring for those parts of Dubai Inc still trying to shake off the debt legacy of the global financial crisis.
It's been said there are only two types of forecast: lucky and wrong. But you increase your chances of landing in the former category if you base your predictions on as many sources of information as possible.
So what follows is based on conversations over the past week with many of the leading players in the Dubai financial community, invariably beginning with: "Happy new year to you too, now about those bank debts …"
There is a consensus that things are much better than they were this time last year. Dubai World is, to all intent and purposes, no longer an issue (although I will qualify this later), while Dubai Holding is being carefully nudged through the negotiation process with creditors and investors.
Those are the two big ones, the debts of which had the potential to derail the Dubai economy, so the fact that there has been significant progress is a good thing. There is still the possibility that another government-related company might need restructuring, especially in the inter-related financial and property sectors, but it will not be of the same magnitude as the big two.
That said, there is still a lot of work to be done at both. Starting with Dubai World, it will come as a surprise to many observers that the deal over its US$24.9 billion (Dh91.45bn) of debts still has not been closed.
Yes, acceptance has been obtained from 100 per cent of financial creditors and the management is on the cusp of achieving the required 95 per cent acceptance level from Nakheel trade creditors and contractors that will enable it to push through the deal. But final completion and implementation is still some months away.
Expect those in March for Dubai World, April at the earliest for Nakheel.
Some other complicated processes must also be completed. Perhaps top of the list is a new management committee at Dubai World, and I'm told the headhunters are busy in this regard.
The company needs a managing director, chief financial officer, representatives of the shareholder and creditors, and one top-notch independent director.
Of these, the first is by far the most important. Whoever gets this job will be in charge of Dubai World for perhaps the next five to eight years, managing the process of debt repayment and asset sales. They will be a portfolio manager of the assets within the Dubai World stable, calculating cash flows, business cycles and disposal values.
In effect, the new managing director will be presiding over the orderly liquidation of Dubai World's estimated $19bn of assets, hoping to get top dollar when values recover sufficiently.
An early part of this dissection will be the removal of Nakheel from the Dubai World umbrella and its establishment as an entirely separate company. This cannot be initiated until the 95 per cent acceptance level is reached, which then kicks off a complex series of contractual and financial renegotiations.
Nakheel is committed to launching a sukuk as part of its commitment to give creditors a tradeable asset as part of the settlement, but it is difficult to see how this can be done until the new Nakheel is established. Expect the sukuk, roughly to the value of $1.6bn, after the first quarter.
At Dubai Holding, the restructuring process is proceeding on a softly, softly basis. Dubai International Capital has agreed to terms on $2.6bn of its debts, and this year will see pressure to sell some of its portfolio of assets, although management is likely to resist a fire sale and wait until values recover, probably next year unless they get an offer too good to refuse.
Dubai Holding Commercial Operations Group (DHCOG) has also made some progress, renegotiating its $555 million revolving facility at the very end of last year. The big event awaited by creditors and investors is the annual report for financial year 2010, expected in March.
This will not be early enough for Moody's Investors Service, the ratings agency that is scheduled to complete its review and possible further downgrade of DHCOG instruments and potential default rating by the end of this month.
The real problems for Dubai Holding are Dubai Property, which suffered like the rest in the slump; and the portfolio of financial interests in the Dubai Group unit, with more than $6bn of debt. The first task here is to clarify the position in consultation with its leading creditors, Royal Bank of Scotland and Emirates NBD.
The secret of good forecasting, it is also said, is to forecast often. I'll try to stick to that with regard to Dubai Inc debt throughout the year.