Dubai Crunch Pinches the Beckhams and Brad Pitt

David Beckham and Brad Pitt are believed to among investors caught up in the latest credit problems affecting Dubai.

Developer Nakheel as well as Dubai World, its government-owned parent company, have asked for a six-month waiting period for debt repayments.

It’s been reported that creditors are owed a total of US$59 billion.

Immediately after raising $5bn from two Abu Dhabi banks, it was announced that the department of finance was requiring a standstill until the last day of May 2010 on all financing to Nakheel and Dubai World, which is scheduled to make a payment on December 14 of $4bn for a bond.

Accountancy firm Deloitte was called in by the government to supervise the restructuring of the company. Through a statement, it said this move would be carried out in order to deal with financial obligations and enhance efficiency for the future.

Dubai’s rapid expansion stemmed greatly from Dubai World’s involvement in the emirate. They spearheaded several key developments including the World Islands and the Palm Jumeirah. But Dubai authorities are now fearing that the company won’t be able to pursue the Palm Jumeirah, leaving one of the major developments a construction site.

These recent outcomes might be an indication that the once immensely prosperous emirate will no longer be able to meet its financial obligations.

As it begins the greatest construction drive in history Dubai carries a debt burden of $80 billion.

Twice it asked Abu Dhabi, the neighboring emirate, for funds. The United Arab Emirate Government has allowed $15 billion in bonds and further backing is to come if it’s state-owned companies are to survive the crisis.

Brad Pitt and Angelina Jolie and the Beckhams were amongst those who bought into the Palm Jumeirah project. In 2002, the 2000 villas and townhouses of het project went on sale and sold out within a month as Dubai was expected to become the top playground on the planet for the rich and famous.

Several English footballers also bought houses worth more than £1 million. These include David James, Joe Cole, Michael Owen, and Kieron Dyer. Cole got out in time, managing to £2.1 million for his villa last summer.