Business Story
Dubai has pumped $7.2 billion into debt-ridden Dubai World
- From: AFP
- February 08, 2010
DUBAI says it has pumped $US6.2 billion ($7.2 billion) into Dubai World and 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 (DFSF), set up a year ago to aid indebted state-run corporations, "has put over $US6.2 billion 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 $US4.1 billion ($A4.74 billion) to cover maturing bonds owed by Nakheel, Dubai World's giant property arm.
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 $US10 billion ($11.6 billion).
The Abu Dhabi-backed central bank of the United Arab Emirates also paid $US10 billion a year ago.
Although Dubai World is owned by the government, the spokeswoman 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 spokeswoman said on condition of anonymity.
Dubai World began late in December negotiations with creditors to restructure about $US22 billion ($25.44 billion) in debt owed by its troubled subsidiaries. So far, no agreement has been reported.
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