Dubai World

Abu Dhabi bails out Dubai (again) with $10 billion

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burj-dubai
The Burj Dubai

Dubai has received $10 billion from its neighbour Abu Dhabi to help Dubai World, the ailing state-owned conglomerate, repay a $4.1 billion Islamic debt which matures today.

A statement from the Dubai government said the extra $6 billion would be used to cater to the needs of Dubai World until the end of April 2010.

“We are here today to reassure investors, financial and trade creditors, employees, and our citizens that our government will act at all times in accordance with market principles and internationally accepted business practices,” Sheikh Ahmed bin Saaed al-Maktoum, the chairman of the Dubai Supreme Fiscal Committee said in a statement.

“Dubai is, and will continue to be, a strong and vibrant global financial center. Our best days are yet to come. ” (Sure!)

Nakheel, Dubai World’s property arm said it would meet its Islamic bond obligations – ‘sukuk’ – within the next 14 days.

The United Arab Emirates central bank would also inject liquidity as needed into banks that face exposure to Dubai World a source close to the Dubai government told Reuters

Read moreAbu Dhabi bails out Dubai (again) with $10 billion

Dubai: Stock Market Drops Most in World on Dubai World Default Concern

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the-future-of-dubai1
The future of Dubai.

See also:

– Dubai World: Nakheel PJSC creditors will get barren waterfront land the size of Manhattan in default (Bloomberg)

– Dubai World prepares to sell overseas assets (Financial Times):

Dubai World may be forced to sell overseas assets as part of its restructuring process, a top Dubai finance official conceded on Monday.

Abdulrahman al-Saleh, director-general of the department of finance, said that the holding company could sell some of its foreign investments and real estate holdings, which include the QE2 cruise liner and Cirque du Soleil, the Canadian circus operator.

“There is nothing to prevent [Dubai World] selling these assets,” Mr Saleh told Al Jazeera television.

Dec. 7 (Bloomberg) — Dubai shares tumbled to the lowest level in more than four months, led by Emaar Properties PJSC and Emirates NBD PJSC, on investor concern that a potential Dubai World default will hurt economic growth in the emirate.

Emaar, the United Arab Emirates’ biggest real-estate developer, slumped 10 percent, the most permitted by exchange rules. Union Properties PJSC closed at an eight-month low, while Emirates NBD retreated to the lowest since Sept. 14. The DFM General Index plunged 5.8 percent, the biggest fluctuation among global benchmarks tracked by Bloomberg, to 1,744.83, the lowest close since July 22.

Dubai World last week began talks with banks to restructure $26 billion of debt, including a $3.52 billion Islamic bond of property unit Nakheel PJSC, and said the remainder of its liabilities are on “a stable financial footing.” The emirate on Nov. 25 said it was seeking a “standstill” agreement on Dubai World’s debt, the holding company with $59 billion in liabilities. Dubai’s benchmark index has declined 17 percent since the announcement.

“Dubai stocks have resumed their slide following yesterday’s technical bounce and nervousness persists about debt restructuring issues,” Mark Friedenthal, fund manager at Abu Dhabi Commercial Bank, said. The benchmark index rose 1.2 percent yesterday.

Read moreDubai: Stock Market Drops Most in World on Dubai World Default Concern