Dubai gets $10bn bail out from Abu Dhabi
Dubai gets $10bn bail out from Abu Dhabi
Monday 14th December 2009
Dubai has received an unexpected bailout from Abu Dhabi in the form of a $10 billion (£6.13 billion) hand out.The government in Dubai announced its United Arab Emirates (UAE) neighbour had given it the crucial funds, which saw immediate positive effects hit the Gulfs stock market.
Dubai will use $4.1 billion (£2.5 billion) of the funds to aid the government-owned Dubai World, who shocked the financial world when it announced it could not repay its debts for six months. Nakheel, Dubai World's property development business, needed the funds to pay investors in an Islamic bond, due today.
Sheikh Ahmad bin Saeed al-Maktoum, chairman of the Dubai supreme fiscal committee: "Today's actions, taken together, demonstrate our strong commitment as a global financial leader to transparency, good governance and market principles.
"There will certainly be challenges periodically, just as there are challenges in other major financial centres around the globe. We believe today's actions will best serve the interests of all stakeholders."
Off the back of the news the Dubai stock market soared by more than ten per cent, while the main index in Abu Dhabi jumped almost 7.5 per cent. The UK's main share index the FTSE 100 rose by 69 points when trading began, to 5,330.
Mr al-Maktoum added: "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."
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