Dubai Government has confirmed it is to plough up to $9.5bn into troubled conglomerate Dubai World, as part of a restructuring plan which will see work continue on major Nakheel projects.
Of this new cash, $8bn will be pumped into the real estate developer, and the remaining $1.5bn into parent company Dubai World.
According to a statement by HH Sheikh Ahmad bin Saeed Al Maktoum, Chairman of the Dubai Supreme Fiscal Committee, the funding will be provided in part by $5.7bn remaining from a loan previously made available from the Government of Abu Dhabi, and the rest from internal Dubai Government resources.
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Sheikh Ahmad added that as part of Nakheel’s restructuring proposal, the company’s bank creditors “will be asked to restructure their debt at commercial rates. Trade creditors will be offered a significant cash payment shortly and a tradable security. Assuming sufficient support for the proposal, the 2010 and 2011 Nakheel Sukuk will be paid as they fall due”.
Describing Nakheel as an “important part” of the emirate’s economy, he said the business plan would allow work “to continue as soon as possible and puts Nakheel on a sound footing. The Government, as shareholder, will work closely with Nakheel so that any future projects are carefully planned and evaluated.”
He added that the restructuring process is expected to take several months to implement, and said that the tribunal process “remains available to protect the companies, their creditors and other stakeholders”.
Assuming sufficient support for the proposal, the 2010 and 2011 Nakheel Sukuk will be paid as they fall due.'
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