a conceptual picture of the world islands by Nakheel

The Dubai Government unveiled today a comprehensive US$ 10 billion crisis rescue package from the Abu Dhabi Government which will enable Dubai World to deal with its forthcoming debt obligations which have shaken the world markets recently. Up to US$3.5 billion of the package may be used to pay-off the sukuk or Islamic Bond for Nakheel due 14 December(1).

News of the payment boosted share markets in the United Arab Emirates. Dubai’s main share index was 10% higher, while Abu Dhabi’s rose more than 7%.

The news also helped the value of the euro and the pound. Both currencies have been unsettled in recent weeks by news of Dubai’s debts.

The chairman of Dubai’s Supreme Fiscal Committee Sheikh Ahmed bin Saaed al-Maktoum said:

“The government of Abu Dhabi has agreed to fund $10bn to the Dubai Financial Support Fund that will be used to satisfy a series of upcoming obligations on Dubai World.“

He added: “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.(2)”

He also announced the implementation of new bankruptcy law.

“This law will be available should Dubai World and its subsidiaries be unable to achieve an acceptable restructuring of its remaining obligations,” he said.

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tags: abu dhabi, infrastructure, news