Dubai gov’t to pump $9.5b into Dubai World
26 Mar 2010
(MENAFN) Dubai government announced that it will inject up to $9.5 billion into the debt-laden Dubai World conglomerate, with a proposal to give creditors their money back in 5 to 8 years and repay two key bonds, Reuters reported.
According to the government’s statement, the proposal includes giving bank lenders new debt covering the $14.2 billion they are owed, and repay in full Dubai World unit Nakheel’s 2010 and 2011 bonds. The proposal calls for no new funds from Abu Dhabi, Dubai’s wealthier neighbor, which bailed out the emirate last year.
However, Dubai’s government will get access to the $5.7 billion remaining from Abu Dhabi’s earlier $10 billion lifeline and pay for the rest of the cash injection itself.
Dubai said that it will pump as much as $8 billion into Nakheel, with a $1.2 billion debt-for-equity swap, in a bid to take the property developer off Dubai World’s hands and place it with the government directly. It said that it will also inject $1.5 billion into Dubai World as part of a recapitalization that would include an $8.9bn debt-for-equity swap.
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