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Finance chief: Dubai fund gives Nakheel $2.45 billion

2009-12-09

DUBAI (Al Arabiya): A Dubai fund designed to help state-linked firms had given Dubai World"s property unit Nakheel $2.45 billion to meet obligations, Dubai"s finance chief said on Tuesday, but it was unclear when the money was disbursed. "The fund ... has given about 9 billion dirhams ($2.45 billion) to Nakheel to meet its obligations," Abdul Rahman al-Saleh told Al Arabiya. Saleh said the money had been injected 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 issue. Dubai shocked the world in November when it asked creditors for a six-month standstill on debt worth billions of dollars held by Dubai World and its subsidiary Nakeel. Saleh told Al Arabiya that six months was not enough time to restructure indebted state-controlled Dubai World, adding that it had enough assets to meet its obligations."The six-month period would focus on the creditors, the contractors and so on," he said. "The government is present to provide backing as an owner ... we would like to emphasize the distinction between guaranteeing and backing. The company receives large backing from the government since its inception," Saleh said. He did not rule out using the land bank of Nakheel, the group"s developer, so long as local law permitted but said the issue could only be decided through talks between the firm and its lenders. Dubai allows foreign ownership only in certain free-zone areas. Saleh also reassured investors that the government would be able to tap debt markets in the future. Dubai raised about $2 billion in an Islamic bond sale earlier this year as part of a wider $6.5 billion borrowing program."We believe yes ... the media exaggerated the situation ... Dubai is capable of meeting its sovereign debt," he said when asked if the debt market would accommodate any borrowing requests by Dubai in the near-future. Dubai World met its main creditors on Monday to discuss its request to delay repayment of $26 billion. The talks aim at finding a final solution and how to reschedule the debt due ... The matter at hand now is a date of the debt maturing this month," UAE"s al-Bayan newspaper reported, citing unidentified sources. The UAE central bank told local banks to report any exposure to Dubai World in a circular dated Dec. 6, bankers said on Monday.