Abu Dhabi stepped in to help troubled fellow emirate Dubai and its state-owned holding company, Dubai World, with $10 billion in financing on Monday.
The announcement by the Dubai Supreme Fiscal Committee comes as $4.1 billion in Islamic bonds became due today.
“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,” Sheikh Ahmad Bin Saeed Al Maktoum, Chairman of the Dubai Supreme Fiscal Committee said in a statement released Monday.
Dubai World shocked investors globally when it asked Nov. 25 for a debt standstill at Dubai World, the government’s flagship holding company, for payments owed on its $26 billion in debts. The holding company includes DP World, the shipping magnate, Nakheel, developer of some of the city’s largest projects and investment company Ishitar.
Some of its foreign investments include the QE2 cruise liner and Cirque du Soleil.
The company asked for a standstill of debts owed until May 30 as it begins restructuring its debt.
“Today the Government of Dubai will announce a comprehensive reorganization law, a framework that is based upon internationally accepted standards for transparency and creditor protection,” the statement said. “This law will be available should Dubai World and its subsidiaries be unable to achieve an acceptable restructuring of its remaining obligations.”
