Dubai World receives $6 billion in state aid
08 Feb 2010
Dubai World has received an infusion of $6.2 billion from Dubai and could get even more, the Dubai fund, whose debt difficulties sent a chill into global markets late last year, said.
The Dubai Financial Support Fund (DFSF), set up in February last year to help stricken state-run corporations, "has put over $6.2 billion into Dubai World Group over the past 12 months," a government spokesperson said.
The spokesman added that DFSF would put in considerably more money into the company in line with its December announcement, with the government having extended $4.1 billion to cover maturing bonds owned by Nakheel, Dubai World's property arm.
Nakheel was rescued from an imminent default thanks to a just-in-time lifeline from Abu Dhabi, which saw Abu Dhabi's total financial aid to Dubai since the global financial crisis hit the emirate to $10 billion.
Although Dubai World is a government undertaking, the spokesperson stressed the funds were extended on a commercial basis.
"These funds would be used for, among other things, working capital and interest expenses for the company's creditors," the spokesman said.
Dubai World began negotiations with creditors in December to restructure some $22 billion in debt owed by its troubled subsidiaries. However, no agreement has been reported so far.
The spokesman said the DFSF and the company were operating within the internationally accepted principles in order to ensure a fair and equitable process for all creditors.
The spokesman added that Dubai World and DFSF were committed to concluding a mutually acceptable consensual restructuring.
