State-owned conglomerate Dubai World has $59 billion of liabilities, a large proportion of the Gulf emirate's total debt, as concerns over how its property subsidiary will manage repayments weigh on the market.
The group, which owns port operator DP World DPW.DI and Istithmar World, the owner of high-end retailer Barneys New York, had 217.79 billion dirhams ($59.27 billion) of total liabilities as at December 31, its subsidiary Nakheel said in a statement on Nasdaq Dubai's website.
"Dubai has previously quantified (its) debt at about $80 billion and most people were attributing that to Dubai World, so the figure is not surprising," said Chet Riley, an analyst at Normura Investment Bank last Thursday.
"The key is to assess the maturity schedule of this debt."
Nakheel, facing a massive debt repayment at year-end, said total assets for the group were 365.76 billion dirhams and total revenue reached 52.3 billion dirhams.
Dubai World and Nakheel were not immediately available for comment when contacted by Reuters.
Nakheel - the state-owned developer of palm-shaped islands off the coast of Dubai - has $3.5 billion worth of Islamic bonds maturing on December 14 and little light has been shed on the government's plans for them.
The three options for Nakheel's bonds are a restructuring, repayment or a default, with the latter considered highly unlikely, analysts say.
A default by Nakheel, Dubai's property flagship, would mark a failure for Dubai World and a catastrophe for Dubai's government, which has ploughed billions of dollars over recent years into making Dubai the Gulf region's tourism and financial hub.
"The prospects of an organised restructuring are diminishing quite rapidly, which leaves us with Nakheel either repaying the bond or defaulting," said Abdul Kadir Hussain, chief executive at Mashreq Capital in Dubai. "That is one of the reasons why the bond price is going up, because investors are buying into the likelihood of a repayment."
Nakheel's 2009 sukuk, or Islamic bond, was trading at 93 cents to the dollar, up from about 87 cents two weeks earlier, he said.
The perceived risk of holding debt issued by Dubai entities had receded substantially after the emirate sold the first $10 billion of a $20 billion bond programme to the United Arab Emirates central bank.
Nakheel said in May it was receiving funds from the Dubai government as it looks to complete projects and pay outstanding obligations.
The emirate launched the second tranche of the bond programme in July and set up a support fund to manage its proceeds.
Nakheel has been hit hard by the global financial crisis, having cut around 900 jobs since the downturn began, in addition to putting projects on hold, including a one-kilometre (3,281-foot) tall tower. Proceeds from the bond scheme would underpin companies such as Nakheel.
Earlier this month Dubai World said it has put on hold several of its projects in Africa as it restructures due to the downturn.