DUBAI (AFP) – Top Dubai officials have been in talks with creditors in London on the possible repayment of all the banking debt owed by the troubled subsidiaries of the Dubai World group, a newspaper said on Sunday.

“The possibility of repaying all bank loans in full was discussed as a medium-term possibility” in the talks held between the delegation and financial leaders in London, The National said, quoting participants.

Dubai sent its ruler’s uncle, Sheikh Ahmed bin Saeed al-Maktoum, who heads its Supreme Financial Committee, and his deputy Mohammed al-Shaibani, to London to discuss Dubai World’s debt problems, after asking last month for a six-month freeze on payments to allow parts of the group to be restructured.

“They made clear there were a number of options the government of Dubai saw as feasible and desirable for Dubai World and repayment in full was one of them,” said one participant, who requested anonymity.

The total outstanding debts of Dubai World subsidiaries that are to be restructured amount to 22 billion dollars after its property subsidiary Nakheel arranged to pay 4.1 billion dollars in bonds which matured last week.

Bank loans are estimated to amount to more than half that value, with British banks’ exposure believed to be more than five billion dollars.

Representatives of the lenders and Dubai World are due to meet on Monday in Dubai in the first formal session of talks aimed at resolving the company?s debt position, the Emirati newspaper said.

Dubai surprised world financial markets last week when it issued a last-minute announcement saying it will repay Nakheel’s maturing debt on time, defusing a crisis that raised fears over the emirate’s ability to pay debts.

The imminent debt was covered by a 10-billion-dollar bailout extended by Abu Dhabi, bringing to 15 billion dollars the oil-rich neighbour’s financial contribution towards sorting out Dubai’s debt problem.

The Abu Dhabi-based central bank of the United Arab Emirates also paid Dubai 10 billion dollars in February to help cover its debts after Dubai was hit by the global financial crisis.

Dubai’s total debt is estimated at between 80 and 100 billion dollars, with Dubai World’s debt amounting to 59 billion dollars.

Former federal treasurer Peter Costello has taken a job as managing director and board member with financial firm BKK Partners.

The company, which was launched today, is made up of a number of former partners and managing directors of Goldman Sachs JBWere.

The company provides independent financial and corporate advice to Australian companies and institutions.

Mr Costello said it was a great pleasure to be joining the company, of which he will be a partner.

“For me it’s a new beginning, a new start, it’s something that I look forward to doing very much,” he said.

Mr Costello said he would not be involved in any political lobbying.

Company chairman Alastair Walton said in a statement that he highly valued his relationship with Mr Costello over the past 30 years.

“Peter Costello’s credentials strongly align with our vision for BKK Partners and we are delighted to welcome him as a full equity partner of the firm,” he said.

Mr Costello said he is looking forward to helping set the strategic direction of the firm.

“The calibre and experience of the team, combined with the enterpreneurial spirit at BKK Partners has impressed me and was integral to my decision to join,” he said.

Last week, Mr Costello was appointed to the Board of Guardians of the Federal Government’s Future Fund.

The fund was set up when Mr Costello was treasurer to meet the cost of Commonwealth superannuation liabilities and has assests worth $64 billion.

Today Mr Costello denied he was being hypocritical in accepting the position from the Government.

“I was the person who announced the Future Fund; it was my policy,” he said.

“I was the person who legislated the Future Fund, I was the person who put $60 billion into the Future Fund, I was the person who appointed the board of guardians of the Future Fund.

“No person was more involved in the setting of the future fund than me.”

Mr Costello quit politics last month after 20 years in Parliament and a by-election for his former Melbourne seat of Higgins will be held on December 5.

By Hayley Bolton and Cortlan Bennett

SHAREHOLDERS have sharply rebuked the Qantas board for the second year in a row over executive pay, delivering a hefty 44 per cent vote against former chief executive Geoff Dixon’s massive remuneration.

The backlash – one of the most resounding “no” votes of this year’s AGM season – caps off a turbulent year for the airline, which booked an 88 per cent slump in its annual net profit in the face of the global economic meltdown.

Qantas yesterday declined to forecast profit for this year but said there was “certainly no further deterioration” in its trading conditions.

Mr Dixon, who left Qantas last November, received $10.7 million for his last year at the airline, despite only serving as CEO for five months.

The final payout included a $1.9 million base, $4.5 million in retention, $657,000 on termination, and a contentious $3 million in compensation for government superannuation law changes that never affected him.

However, he said the board was honouring a contract with Mr Dixon and it had been important to retain his services in the aftermath of a failed private equity bid in 2007.

“Geoff’s final-term payments were in accordance with a contract that was put in place some years before and to ensure management continuity,” he said.

“Geoff was regarded as one of the top airline executives in the world.”

High-profile governance advisers, including RiskMetrics and CGI Glass Lewis, had recommended big shareholders vote against the remuneration report.

Smaller shareholders agreed yesterday with Australian Shareholders Association representative Douglas Armati, telling the meeting the payment to Mr Dixon was “hardly in the spirit of Australia”.

“Shareholders are angry, they want change, they are out of pocket in terms of the market value of their shares and dividends,” he said.

“The pockets of executives, however, seem to be as full as ever, especially those of Mr Dixon.”

Despite some shareholder opposition, James Strong, who chairs the Qantas remuneration committee, kept his position as a director, along with General Peter Cosgrove and audit committee chairman Garry Hounsell.

Qantas booked a $117 million net profit for the year to June, down from $969 million the previous year.

New chief executive Alan Joyce told shareholders yesterday the global economic outlook remained uncertain but the company was seeing some “encouraging signs and certainly no further deterioration”.

He declined to provide a profit outlook for this financial year, citing the volatile Australian dollar and oil price.

Mr Joyce said after the meeting that business traffic had suffered and needed to improve but budget arm Jetstar was performing strongly amid “very healthy leisure markets”.

Overall demand had recovered more quickly than expected.

“We saw an over 20 per cent decline (from) April in our international yields and around low teens for the domestic yields,” Mr Joyce said.

Qantas plans to cut costs by $1.5 billion over the next three years, starting with a target of $500 million this financial year.

Key components of the cost-cutting plan include reconfiguring aircraft, including the superjumbo A380, technology advancements and fuel conservation.

Qantas shares were unchanged yesterday at $2.99.

A SURPRISE fall in the unemployment rate yesterday sent the Australian dollar through US90c, pushed the sharemarket sharply higher and ensured the Reserve Bank would deliver more interest rate rises before year’s end.

The dollar surged US1.28c to close at US90.27c in local trade — its highest level since August last year — and had moved to US90.40c in early offshore trade last night after the unemployment rate in September defied expectations and dropped from 5.8 per cent to 5.7 per cent.

Gold surged another $US13 an ounce to a record $US1055/oz.

Financial markets had forecast a contraction of 10,000 jobs during the month, but there was a spectacular creation of 35,400 full-time positions and 5200 part-time jobs.

The result appeared to justify the RBA’s decision to lift official interest rates to 3.25 per cent on Tuesday and financial markets now agree that the tightening monetary policy cycle will be extended in the next few months.

The likelihood of higher rates and the surging dollar have prompted economists to question whether parity with the US greenback could occur in the next few months.

Citi chief economist Paul Brennan said the Aussie dollar’s surge, coupled with ongoing weakness in the US dollar and the broader US economy, meant parity could be achieved.

“It can’t be ruled out, but I think it depends on when the US economy gets its act together,” Mr Brennan said.

“If their economy starts to strengthen, that might take some of the edge off the Australian dollar but at the moment all the signs are very mixed.”

The interbank futures market, which tipped the surprise interest rate rise this week, is certain there will be another 25-basis-point increase when the RBA board meets in November.

The pricing for a move at that meeting has soared from 75 per cent to 99 per cent while economists expect the RBA could tighten monetary policy again in December.

Share traders embraced the news, adding to a 100-point rise in the S&P/ASX 200 on Wednesday with a 72.9-point (1.55 per cent) gain to 4768.8, while the broader All Ordinaries jumped 67.5 points (1.44 per cent) to 4763.3.

The increase on the S&P/ASX 200 added $18.89 billion to the value of Australian shares yesterday, building on the $27bn that was ploughed into the market on Wednesday.

The buoyant sentiment was also evident in Asia, where Hong Kong’s Hang Seng index gained 1.18 per cent and Tokyo’s Nikkei index was up 0.3 per cent.

In early trading last night, there was a positive tone on European markets as the FTSE 100 in London was up 1 per cent, the French CAC was 1.36 per cent higher and the German DAX had gained 1.36 per cent.

The futures were indicating a strong night in New York, with Wall Street expected to open as much as 86 points higher.

The appreciation of the Australian dollar dominated the international market’s attention last night, after strong buying of the domestic currency from foreign funds.

Westpac chief economist Bill Evans said the Aussie dollar was expected to rally towards the end of the year, but the currency could be hit with substantial volatility as the recovery of the US economy took place.

“In the first half of 2010 we look for a substantial US5c to US10c correction due to renewed global concerns about risk,” Mr Evans said.

“We see genuine risks of a double dip for the US in 2010.”

Citi’s Mr Brennan said the strong job numbers meant the RBA would act again on interest rates, but the central bank would be keen not to damage business and consumer sentiment by lifting rates sharply.

“We are coming from such a low level of interest rates, I think it’s appropriate we are moving back to more normal levels. But I think the RBA will stick with 25 basis points each time. They don’t want to scare the horses.”