The government of Dubai, acting through the Supreme Fiscal Committee (SFC), on Monday said that its neighbour Abu Dhabi had agreed to give $10 billion in emergency funds that will go toward paying debts owed by its Dubai World conglomerate.
Out of the total $10 billion, it would use $4.10 billion to repay Nakheel's Islamic bond maturing on Monday, while the rest will be used to finance Dubai World's obligations through the end of April 2010, the government of Dubai said in a release.
Announcing this, Sheikh Ahmad Bin Saeed Al Maktoum, chairman of the Dubai Supreme Fiscal Commitee, said that the UAE central bank, based in Abu Dhabi, is also prepared to support local banks.
He said that the remaining funds would be used for interest payments and working capital of Dubai World through 30 April 2010 on condition that the company successfully negotiates a ‘standstill’ agreement with creditors as earlier announced.
On 25th November, the Dubai government said that the State-run holding company is seeking a 'standstill' agreement on its debt, including the Nakheel unit.
Mr Al Maktoum said that the government of Dubai would announce a comprehensive reorganisation law, a framework that is based on internationally accepted standards for transparency and creditor protection. — Yogesh Sapkale