Dubai to pay $5.7b debt
Abu Dhabi gives Dubai US$10b in bailout money
Dubai allocates $4.1b for immediate Dubai World debt
Dubai enacts new bankruptcy law
Abu Dhabi is the largest member of the United Arab Emirates federation and a big oil exporter. -- PHOTO: REUTERS
DUBAI - ABU Dhabi stepped in to help fellow United Arab Emirates member Dubai with a US$10 billion (S$14 billion) injection, of which $4.1 billion was allocated to troubled state-owned conglomerate Dubai World to pay immediate obligations, Dubai said on Monday.
The move was the least expected of all options Dubai had on the table after requesting a standstill on $26 billion in Dubai World debt on Nov 25, alarming markets and shaking the image of the emirate as a regional business hub.
'The government of Abu Dhabi has agreed to fund $10 billion to the Dubai Financial Support Fund that will be used to satisfy a series of upcoming obligations on Dubai World,' the chairman od the Dubai Supreme Fiscal Committee said in a statement. 'As a first action for the new fund, the government of Dubai has authorised $4.1 billion to be used to pay the sukuk obligations that are due today.'
Abu Dhabi is the largest member of the United Arab Emirates federation and a big oil exporter. '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 said in the statement.
'Dubai is, and will continue to be, a strong and vibrant global financial center. Our best days are yet to come.'
Excess funds would be used to cater to Dubai Worlds needs up until the end of April 2010, the statement said. Dubai has announced a bankruptcy law that it said could be used in case Dubai World and creditors failed to reach an agreement on debt maturing in the future. -- REUTERS
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