Dubai gets $10b from Abu Dhabi

Abu Dhabi stepped in to help Dubai with a $10 billion injection, of which $4.1 billion was allocated to state-owned conglomerate Dubai World to pay immediate obligations, Dubai said on Monday.

By Agencies

Published: Mon 14 Dec 2009, 12:12 PM

Last updated: Thu 2 Apr 2015, 3:48 AM

“The government of Abu Dhabi has agreed to fund $10 billion to the Dubai Financial Support Fund that will be used to satisfy a series of upcoming obligations on Dubai World,” Shaikh Ahmad Bin Saeed Al Maktoum, Chairman of the Dubai Supreme Fiscal Committeesaid in a statement.

“As a first action for the new fund, the government of Dubai has authorised $4.1 billion to be used to pay the sukuk obligations that are due today.”

The yen fell sharply against other currencies on the news, while the dollar shot up to 88.90 yen and the euro also jumped to 130.43 yen.

S&P futures jumped to be up 0.7 percent, reversing early losses and pushing Treasury futures to session lows. Hong Kong’s Hang Seng index shot up 300 points in the last minutes of morning trade to finish in positive territory, while other markets across Asia also pushed higher.

“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,” Shaikh Ahmadsaid in the statement.

“Dubai is, and will continue to be, a strong and vibrant global financial center. Our best days are yet to come.”

Excess funds would be used to cater to Dubai Worlds needs up until the end of April 2010, the statement said.

“Dubai will announce a comprehensive reorganisation law, a framework that is based upon internationally accepted standards for transparency and creditor protection,” Shaikh Ahmed said.

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

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