Dubai said it has pumped $6.2bn into Dubai World and that it is prepared to put even more money into the conglomerate whose debt woes caused global market jitters late last year.
The Dubai Financial Support Fund, set up in February last year to aid indebted state-run corporations, “has put over $6.2bn into Dubai World Group over the past 12 months,” a government spokeswoman said.
“The DFSF stands ready to put considerably more money into the company in line with the announcement it made” in December, when the government forked out $4.1bn to cover maturing bonds owed by Nakheel, the giant property arm of Dubai World.
Dubai was able to rescue Nakheel from an imminent default thanks to a last-minute lifeline from neighbouring Abu Dhabi, which brought Abu Dhabi’s total financial aid to Dubai since the global financial crisis hit the emirate to $10bn.
The Abu Dhabi-backed central bank of the United Arab Emirates also paid $10bn last February.
Although Dubai World is owned by the government, the spokeswoman stressed that the funds were extended on a commercial basis. “This money was made available to the DFSF on commercially reasonable terms, and the DFSF has endeavoured to advance these funds to the company on a commercial basis,” she said, without disclosing the rate of interest offered.
“These funds would be used for, among other things, working capital and interest expenses for the company’s creditors,” the spokeswoman said on condition of anonymity.
