Words: Ashley Rigg
Published: 8th December 2009
Dubai’s biggest developer is bailed out
Dubai World, owner of Dubai’s largest property developer, Nakheel has been handed $2.45 billion to meet its debt obligations, although it is not clear when the payment was made.
Emirates 24-7 reports that a Dubai fund financed by the United Arab Emirates' central bank and two Abu Dhabi banks handed the money directly to Nakheel to help fund interest payments on its outstanding loans which total more than $59 billion.
Abdulrahman al-Saleh, director general of Dubai's Finance Department told Al Arabiya television that Nakheel had been handed the money since “the crisis” but did not specify if he was referring to the global financial crisis which hit the emirate's real estate sector late in 2008 or the Dubai World debt crisis which
sent bond and equity markets into tailspin last week.
Dubai World met creditors yesterday to discuss its request to delay $3.5 billion of debt repayment which falls due December 14th. However, with no deal agreed, investors sold shares this morning forcing the Dubai stock market to a 21-week low.
It is widely believed that Abu Dhabi, its richer emirate neighbor will come to the rescue of Dubai in return for enhanced political influence.
None-the-less, confidence in Dubai’s property market has been shaken further and some commentators are speculating further
price falls of more than 30%.
Further coverage on
Reuters and
Emirates 24-7.
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