Dubai's government said Monday it had received $10 billion in emergency funds from its neighbor Abu Dhabi that will help pay debts owed by the struggling Dubai World conglomerate. Dubai World had been up against a Monday deadline to repay a debt from its Nakheel property division. Some $4.1 billion of the bailout money will be used to pay off those bills.
"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," Sheikh Ahmed bin Saeed Al Maktoum, chairman of the Dubai supreme fiscal committee, said in a statement, cited by the AP. "Our best days are yet to come."
Dubai's government said the rest of the funds provided by Abu Dhabi will be used to cover Dubai World's interest expenses and general business needs through the end of April, and to pay bills owed to "existing trade creditors and contractors."
Dubai World welcomed the financial aid, which will provide "funding and a stable basis" for a restructuring the company announced last month. The conglomerate said it is pushing ahead with talks to convince lenders to agree to a "standstill" — effectively a delay — on paying back some other debt it owes. "As long as a standstill is successfully negotiated, Dubai World has assurances that the government of Dubai ... will provide financial support to cover working capital and interest expenses to ensure the continuity of key projects," the company said.