Dubai World, the main investment arm of the Middle Eastern city-state, is asking for at least a six-month delay on paying back a nearly $60 million debt that due this month.

Dubai World borrowed billions of dollars to acquire some of the most high-profile commercial developments in the United States in recent years, and it could be forced to sell them at a loss if the Persian Gulf conglomerate can't restructure its debts.

List of aquisition:
Istithmar World, spearheaded the holding company's acquisition of the Mandarin Oriental, New York, for about $380 million in 2007, and a 50 percent stake in the Fontainebleau Miami Beach for about $375 million last year.

Dubai World also bought the CityCenter Casino & Resort in Las Vegas for about $5.4 billion.

Earlier in the year the Dubai’s stock market was down 60% and many residents believed that the property market was on the brink of collapse.

Dubai had borrowed billions to finance its infrastructure and construction companies such as Dubai World, and Emirates Airline.

That's not the only situation in Dubai. As for Malaysian construction firms are less affected; IJM Corp Bhd (completed most projects includes construction of Fortune Tower at Jumeirah Lake). Gamuda Bhd top official said the company was not significantly exposed to the fallout in the construction sector in Dubai.

Interior fit-out (IFO) company LCL Corp Bhd founder and executive chairman Datuk Low Chin Meng said payments were generally slow in Dubai. They will shift focus on interior fit-out (IFO) contracts in cash-rich Abu Dhabi, after the completion of projects in Dubai. The company has projects such as Atlantis The Palm Hotel, Dubai Metro System, Dubai Mall and Dubai Marina Hotel.

Al-Saleh (Dubai Finance Department Director-General) said Dubai World's problems started from a reliance on previously easy-to-get, short-term loans that were used to finance long-term projects like luxury high rises and even more manmade islands.

Most of Dubai World loans range from three to five years, whereas the projects that were financed range from 25 to 30 years. The difference between the finance terms and carrying out the projects led to this crisis.

Dubai World had spent over US$12 bil on Palm Jumeirah – a palm shaped island off Dubai. Other than the super luxury Atlantis Hotel and some residential units, the island remains under-populated.

Palm Jumeirah

The Atlantis Hotel

The World

Other developments include The World – a group of artificial islands costing US$14 bil to build. As money ran out, some of these islands are facing erosion.

The soon-to-be completed Burj Dubai, towering over 800m or almost twice the height of Petronas Twin Towers, has become an essence of past excesses. No doubt Dubai has achieved a lot but excesses built on debt often crumble when credit is removed.

Burj Dubai - 818 metre