Reader's question: Dubai World has refused to offload assets at fire-sale prices to repay obligations, forcing it to seek a debt standstill, a newspaper report on Sunday quoted an unnamed source at the government-controlled firm as saying Could you explain “fire-sale price”?

My comments:

A fire sale, as name suggests, is a sale that takes place after a fire. Goods surviving the fire may be damaged, burned or at least covered in soot. If the shop continues to sell them, you can imagine they may sell them at knocked down prices.

In the above example, Dubai World refused to offload assets because it feared that if it did, it could have sustained greater losses because buyers would have been seeking extremely low prices to take advantage of its debt problems.

It turns out to be a wise policy. Dubai, if you follow the news, was 4 billions dollars in debt and has now been bailed out by Abu Dhabi.

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Go to Zhang Xin's column

本文僅代表作者本人觀點，與本網立場無關。歡迎大家討論學術問題，尊重他人，禁止人身攻擊和發布一切違反國家現行法律法規的內容。

Zhang Xin has been with China Daily since 1988, when he graduated from Beijing Foreign Studies University. Write him at: zhangxin@chinadaily.com.cn, or raise a question for potential use in a future column.