One debt down

One debt down

The Abu Dhabi government has given Dubai $10 billion to help pay off its debt, including Nakheel’s $3.52 billion Islamic bond that matures today.

December 14, 2009 11:39 by Dana El Baltaji

Dubai government’s announcement that the Dubai Financial Support Fund received $10 billion from the government of Abu Dhabi to help Dubai World, a state-owned conglomerate, meet its financial obligations came only hours before Nakheel’s deadline.

Nakheel, the developer behind The Palm islands in Dubai, and a subsidiary of Dubai World, is due to repay creditors on Monday $3.52 billion, plus another $580 million in interest. The developer saw a loss of AED13.4 billion ($3.65 billion) during the first half of the year, with revenues falling to AED1.97 billion, 78 percent less compared to the same period last year.

The funds from the Abu Dhabi government will go toward paying off Nakheel’s debt, in addition to repaying existing creditors, explained Sheikh Ahmad Bin Saeed Al Maktoum, chairman of the Dubai Supreme Fiscal Committee, in statement released on December 14.

He said: “The remaining funds would also provide for interest expenses and company working capital through April 30, 2010 – conditioned on the company being successful in negotiating a standstill as previously announced”

“In addition, the Government of Dubai is particularly focused on addressing the concerns of Dubai World trade creditors within the Emirate of Dubai. To help address these concerns, today the Government of Dubai is announcing that the remainder of the funds provided will be used for the satisfaction of obligations to existing trade creditors and contractors. Discussions with affected contractors will begin in short order,” he added.

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Tags: $10 billion, Abu Dhabi, debt, Dubai, Dubai Financial Support Fund, nakheel, sukuk

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8 Comments

Mishaal on December 14, 2009 12:53 pm

The rest will be paid by privatisation.
Josef Tool on December 14, 2009 1:14 pm

Yeh right privatisations the answer… there will be great returns/profits to those investors… Not!
Thomas on December 14, 2009 1:27 pm

This is the time for all residents of the UAE – Nationals & Expatriates – to support this country; the last thing we want is a run on banks caused by panic withdrawal or a ‘sell & run’ mentality. Pray for God’s mercy and blessings on this land.
ALI on December 15, 2009 8:56 pm

THANK YOU
YOU SAID RIGHT
Josef Tool on December 17, 2009 2:45 am

The UAE has treated the expatriates in Dubai as a cash cow… don’t expect their suppot now!
john on December 17, 2009 9:33 am

Thomas – Dubai has been very clear in its attitude towards expats; dubai is not their home, expats are just visitors. As a result, expats will not feel indebted to dubai and will not support it.
Andrew on December 17, 2009 10:19 am

Mooooooooo
DeniseTheMenace on December 19, 2009 10:18 am

THOMAS – Are you a businessman/investor in Dubai/UAE ???
JOHN – You’re right – Its these times when you recall: Reap what you will sow !!! We expats are treated as long-time visitors (our future residency/stay is “renewed/reviewed” every three years even though I know guys 30 yrs in this country now!!! So how can an overwhelmiong majority not feel detached from the collective UAE/Dubai feeling as espoused by Mr. Thomas above.
I suspect Thomas is either too naive or one with money sunk here in UAE…