Forum Views ()
Forum Replies ()
Read more with google mobile :
Dubai to pay debt with $10 billion Abu Dhabi fund
Yahoo!
My Yahoo!
Mail
More Yahoo! Services
Account Options
New User? Sign Up
Sign In
Help
Yahoo! Search
web search
Home
Singapore
Asia Pacific
World
Business
Entertainment
Sports
Technology
Dubai to pay debt with $10 billion Abu Dhabi fund
AFP - Tuesday, December 15
Send
IM Story
Print
View of downtown Dubai, on December 2. The Dubai government said Monday it will pay 4.1 billion dollars to cover Islamic bonds issued by its Nakheel property developer which mature Monday after receiving 10 billion dollars from Abu Dhabi.
DUBAI (AFP) - – The Dubai government said Monday it will pay 4.1 billion dollars to cover maturing Islamic bonds issued by its Nakheel property developer after receiving a 10-billion-dollar handout from oil-rich Abu Dhabi.
The announcement prompted a surge on the Dubai stock market, which was up more than 10 percent in early trade Monday, while the market in neighbouring Abu Dhabi was up nearly 8.0 percent.
"The government of Abu Dhabi has agreed to fund 10 billion dollars to the Dubai Financial Support Fund that will be used to satisfy a series of upcoming obligations on Dubai World," an official statement said.
"As a first action for the new fund, the government of Dubai has authorised 4.1 billion dollars to be used to pay the sukuk (Nakheel Islamic bonds) obligations that are due today," it added.
The nature of the fund, being a loan or a grant, was not disclosed.
The announcement comes on the day Nakheel was supposed to repay sukuks worth 3.5 billion dollars and the return on them amid speculations that the troubled developer would not be bailed out.
Dubai has worked closely with the central bank of the United Arab Emirates (UAE) and the government of Abu Dhabi to find a solution to the debt problems, said the statement issued by Sheikh Ahmed bin Saeed al-Maktoum, the head of the Dubai Supreme Fiscal Committee.
This included "addressing and assessing the impact of Dubai World on the UAE economy, banking system and investor confidence," it said.
Rating agencies had downgraded several Dubai corporates after Dubai said on November 25 that it wanted to freeze debt repayments by its heavily-indebted Dubai World group -- liable for 59 billion dollars -- in order to restructure the largest state-run company.
The announcement clears the uncertainty that loomed over Nakheel's immediate financial obligations, but does not resolve the debt problems of Dubai corporates, said analyst Fahd Iqbal from regional investment bank EFG-Hermes.
"The main positive of this event is that it removes the sharp uncertainty associated with Nakheel and also substantially limits systemic risk to the economy," he said.
"Fundamentally, little has changed for Dubais outlook. We continue to see risk of further debt problems emerging in the coming months and quarters," he said, highlighting debt by the government-owned Dubai Holding and Dubai's investment arm Istithmar, which is part of Dubai World.
Monday's statement said that the remainder of the 10 billion dollars will "provide interest expenses and company working capital through April 30, 2010."
But it said that the latter will be "conditioned on the company being successful in negotiating a standstill as previously announced."
The means that the company will still have to go back to creditors to restructure its remaining debt.
"The remainder of the funds provided will be used for the satisfaction of obligations to existing trade creditors and contractors. Discussions with affected contractors will begin in short order," it added.
Dubai World had said earlier that not all its subsidiaries would be involved in the restructuring, pointing out that the debt of the concerned units amount to 26 billion dollars.
The statement also said that the government will later Monday issue a "comprehensive reorganisation law, a framework that is based upon internationally accepted standards for transparency and creditor protection."
"This law will be available should Dubai World and its subsidiaries be unable to achieve an acceptable restructuring of its remaining obligations," it added.
This step seems aimed at appeasing creditors who have been scared off by Dubai's earlier announcement that it might not be able to pay Dubai World debt and its insistence that the government would not guarantee state-corporates debt.
"It appears that Dubai is effectively preparing a bankruptcy law to be used in the event that debt obligations can neither be re-paid nor restructured," Iqbal said.
The once rapidly-booming economy of Dubai has been hit hard by the global financial crisis, which turned off the tap on easily-available foreign finance, leaving many of its companies high and dry with a heavy debt burden.
The total debt of Dubai government and its state-run companies is a minimum of 80 billion dollars, and estimated to run into 100 billion dollars.
Recommend
Send
IM Story
Print
News Search
Top Stories
Citi to repay $20 bln in plan to exit bailout
Dubai to pay debt with $10 bln Abu Dhabi handout
Koalas, penguins at risk of extinction: study
Jackson, Boyle and Tiger transfix in 2009
Cadbury says rejects 'inadequate' Kraft takeover bid
More Top Stories »
ADVERTISEMENT
Most Popular
Most Viewed
Most Recommended
Top British banker admits 'mistakes' on bonuses
Dubai to pay debt with $10 billion Abu Dhabi fund
Tiger Woods' girlfriend apologizes in TV interview
Fed likely to dampen speculation on early exit
US jobless rate 'could rise further'
More Most Viewed »
Global stocks mixed amid Dubai debt crisis
Tiny magnetic discs could kill cancer cells: study
Virgin unveils spaceship to offer space tourism
Tiger Woods' girlfriend apologizes in TV interview
Dubai blackout over debt plans to hit Gulf markets
More Most Recommended »
Elsewhere on Yahoo!
Financial news on Yahoo! Finance
Stars and latest movies
Best travel destinations
More on Yahoo! News
Subscribe to our news feeds
Top StoriesMy Yahoo!RSS
» More news feeds | What are news feeds?
Also on Yahoo
Answers
Groups
Mail
Messenger
Mobile
Travel
Finance
Movies
Sports
Games
» All Yahoo! Services
Site Highlights
Singapore
Full Coverage
Most Popular
Asia Entertainment
Photos
Copyright © 2009 Yahoo! Southeast Asia Pte. Ltd. (Co. Reg. No. 199700735D). All Rights Reserved.
Terms of Service |
Privacy Policy |
Community |
Intellectual Property Rights Policy |
Help
Other News on Monday, 14 December 2009 Israel funnels millions of dollars to settlements
Catalans vote in symbolic independence referendum
Campaign mocks treatment of Iran student leader
Leaders strike deal on Sudan democratic reforms
Berlusconi bloodied by hit to face, says he's fine
|
Supreme leader says Iran's opposition violates law
US jobless rate 'could rise further'
Greek economy minister urges immediate reforms
With Gaza cease-fire, south Israel blossoms
Israel expels Jewish seminary from army deal
|
Houston is first major US city to elect gay mayor
Iran's Khamenei issues stern warning to opposition
Iran's president pledges support to Hamas leader
PLO set to extend Abbas term as Palestinian leader
300 stuck temporarily on Disney World monorail
Turkmenistan-China pipeline to start Monday
`Princess and the Frog' hops to No. 1 with $25M
Nobel-winning economist dead at 94
NKorean weapons seizure could affect nuke talks
S Philippines grapples with crisis after crisis
Politics dominate Calif education reform effort
Turkmenistan-China gas pipeline to open Monday
Authorities: Rottweiler mauls, kills Fla. toddler
Thaksin back in Cambodia as Thai "spy" to be freed
Senator says opposition grows to Medicare buy-in
Taiwan fishermen 'fall victim to climate change'
Houston biggest US city to elect openly gay mayor
Senate to vote on $1.1 trillion spending bill
US-ENTERTAINMENT Summary
Disney's Princess charms weekend moviegoers
|
Disney's "Princess" charms weekend moviegoers
Reggae star Buju Banton facing drug charge in Fla.
`Princess and the Frog' hops to No. 1 with $25M
Gunmen storm Afghan police post, kill 8: governor
Italian protester breaks Berlusconi's nose
|
Italy's Berlusconi in hospital after attack
2009: the Year of Twitter and Facebook
Afghan war decision toughest of presidency: Obama
Fed likely to dampen speculation on early exit
Russia cuts gas to Armenia after bomb found: report
|
Greece waits for its financial medicine
Accenture ends relationship with Tiger Woods
Afghan air strike wreaks more havoc in Germany
Nanomaterial used in cancer tests, medicine delivery
Conservative favored in Chile presidential run-off
|
Mobile phone English lessons a hit in Bangladesh
Timeline of Iranian, North Korean nuclear programs
Decades-old dioxins pollute river, divide US community
Israel votes new funding for settlements
Democracy referendum plan heats up Hong Kong politics
|
Kurds, Turkish nationalists clash in Istanbul
Low turnout in Catalan independence referendum
|
Myanmar rebels grow more opium to buy arms: report
|
Brown in Afghanistan vows new push to defeat Taliban
Iraq: No time to act after US tip before blasts
Kurds, Turkish nationalists clash in Istanbul
|
Saudi opposition petitions for vote after floods
China blocks Sun TV signal in content crackdown
|
Israel okays millions of dollars in aid to settlements
Highlights of UN resolution against NKorea
Thais extend North Korean arms cargo crew's detention
AP INVESTIGATION: Monsanto seed biz role revealed
Google to produce, sell own Nexus One phones: report
|
US mulls Predator strikes in Pakistani cities: report
Kidney donor's night-before-surgery poem
Accenture ends relationship with Tiger Woods
|
Nurses are key to matchmaking in kidney swap
Hardline Pakistani schools a draw for foreigners
Apple fires back at Nokia in patents battle
|
Avalanche fears, clouds hamper search for climbers
Cambodia frees convicted Thai spy
Lieberman resists Medicare buy-in plan
Crew of NKorean weapons plane in Thai court
Venezuela's Chavez sees U.S. 'threat' over Iran ties
Plane crew held for 12 more days over weapons haul
Obamas join stars for Christmas benefit concert
Obama: Expect no more White House gate-crashers
Woman executed in China over child prostitution
China might not take climate change funding: FT
UN: 2 UN hostages freed from Darfur
Weather forecast for the Asia-Pacific region
46 injured in pileup of about 50 cars in Conn.
Johnny Depp can't get used to winning awards
Seoul shares turn up on Dubai news; builders rise
Toyota to start selling plug-in hybrids in 2011
Mercedes-Benz sees China sales up 15 pct in 2010
Korea Hot Stocks
Confidence up at Japanese manufacturers
Obama's brother turns down film role
Pakistan
Johnny Depp can't get used to winning awards
Japan's business confidence grows: central bank
Seoul shares turn lower; KOPEC jumps on debut
History miniseries takes on the Kennedys
|
Taiwan dollar near flat in thin trade, eyes stocks
`Precious,' `Up,' `Hangover' make AFI top-10 list
Downey's Sherlock Holmes an action hero
|
S.Korea Nov ind power demand growth at 8-yr high
L.A. critics honor Iraq war movie Hurt Locker
|
Luxury travel business bounces back
NBC launching Chuck game
|
`Hurt Locker' wins LA Critics' best-picture prize
Hundreds of Indian languages struggle to survive
Big US box office kiss for Disney's 'Frog Princess'
US-TECH Summary
EU warms to Oracle-Sun deal
Detained Americans to be tried in Iran: minister
|
Insurgent foe's slaying shows cracks near Baghdad
Koalas, penguins at risk of extinction: study
Hi-tech, eco-friendly dream home takes shape in Japan
U.S. forces chief warns of Afghanistan fight
|
Gunmen kill 16 police in Afghan ambushes
Jackson, Boyle and Tiger transfix in 2009
Cadbury says rejects 'inadequate' Kraft takeover bid
Bin Laden: symbolic icon in impenetrable fortress
Dubai to pay debt with $10 billion Abu Dhabi fund
Turk PM calls for unity after Kurdish party ban
|
Pakistan seeks clues on jailed Americans
|
Iran says makes arrests over torn Khomeini picture
|
Will Ecuador drought dry up Correa's popularity?
|
Motorized bar stool from DUI case fetches $1,125
DNA map shows pandas may lack meat taste buds
Katrina recovery was test of ability to adapt
Beijing cuts broadcaster's signal amid media crackdown
EU warms to Oracle-Sun deal
|
Iran to put three US hikers on trial
Accenture ends relationship with Tiger Woods
|
Democracy "referendum" plan heats up HK politics
Boxer's opponents capitalize on 'ma'am' exchange
U.S. envoy says no timetable yet for North Korea talks
Gaps in DNA databanks have led to tragedy
NBA launches Web, mobile sites for fans in India
|
Pakistan police probe Americans in terror case
NATO: Top US defense official visits Afghanistan
Accenture marks 1st sponsor to cut ties with Woods
Protest widens against creation of new Indian state
Clinics help people represent themselves in court
Philippine troops kill one militant after jailbreak
Obama to meet with bankers, then Lebanon's leader
Cambodia frees Thai 'spy' after pardon by king
26 operations, 13 kidneys: hope to few with little
16 policemen killed in 2 attacks in Afghanistan
Korean derivative funds rebound sharply; risks eyed
Toyota aims to roll out plug-in Prius in two years
`Avatar' joins tradition of the Hollywood colossus
China unveils landmark Turkmenistan pipeline
Coal still king in China, despite climate pledge
India inflation hit 4.8 percent in November
S.Lanka set for record current account surplus
Confidence grows at Japanese manufacturers
Golden Globes nominations launch Oscars race
India's gold retailers jump on the 'brandwagon'
History miniseries takes on the Kennedys
Downey's "Sherlock Holmes" an action hero
NBC launching "Chuck" game
Greece at new risk of being pushed off euro
Bodies of missing Tenn. mom, Jo Ann Bain, and daughter found
Female Breasts Are Bigger Than Ever
AMD Trinity Accelerated Processing Units Now in Volume Production
The Avengers (2012 film), made the second biggest opening- and single-day gross of all-time
AMD to Start Production of piledriver
Ivy Bridge Quad-Core, Four-Thread Desktop CPUs
Islamists Protest Lady Gaga's Concert in Indonesia
Japan Successfully Broadcasts an 8K Signal Over the Air
ECB boosts loans to 1 trillion Euro to stop credit crunch
Egypt : Mohammed Morsi won with 52 percent
What do you call 100,000 Frenchmen with their hands up
AMD Launches AMD Embedded R-Series APU Platform
Fed Should not Ignore Emerging Market Crisis
Fed casts shadow over India, emerging markets
Why are Chinese tourists so rude? A few insights