Dubai could sell QE2 to tackle debts

Dubai could be forced to sell the QE2 cruise liner to raise cash for the emirate’s ailing economy, according to reports.

Advisers for Dubai World, the state-backed conglomerate, plan to sell a number of assets owned by Istithmar, its private equity arm. The money raised would be used to pay off some of Dubai World’s $22 billion debts, the Sunday Times reports.

Istithmar bought the QE2 from Cunard in June 2007 for £50 million and it arrived in the emirate in late 2008. Plans to turn it into an ultra-luxury floating hotel have never materialised.

The company, which is receiving advice from Deloitte, is expected to sell its assets individually rather than as a portfolio. It began the process last week when it sold a 13% stake in Indian domestic airline SpiceJet.

It has also entered into talks to sell Inchcape Shipping Services, the UK port agent, with a mooted $700 million price tag.

Istithmar has built up a worldwide portfolio of assets in recent years. It also owns the Mandarin Oriental hotel in New York and holds a 50% stake in Atlantis The Palm Hotel at the Jumeirah Beach resort in Dubai.