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Dubai World and Nakheel property arm to get up to $9.5 billion in new funds amid restructuring
By BARBARA SURK
Associated Press Writer
(AP) 07:14:15 AM (ET), Thursday, March 25, 2010 (DUBAI, United Arab Emirates)
Dubai's government said Thursday it will pump up to $9.5 billion into Dubai World as part of a long-awaited restructuring plan to rescue its chief conglomerate from a crippling debt crisis that undermined investor confidence in the one-time Arab boomtown.

The proposal, which still needs approval from creditors, comes after months of talks following Dubai World's bombshell announcement in November that is would seek delays in repaying $26 billion in debt until at least May. The conglomerate's woes came to symbolize Dubai's boom to bust as the global meltdown dried up the cheap credit on which the glitzy city-state had depended to fuel its meteoric growth.

Sheik Ahmed bin Saeed Al Maktoum, the chairman of Dubai's supreme fiscal committee said in a statement that the support aims to ensure Dubai World and property development arm Nakheel "are key contributors to the strong economic future of the Emirate of Dubai and the wider United Arab Emirates."

Sheik Ahmed, who is also the uncle of Dubai's ruler, says the new funding includes $5.7 billion of the money remaining from a bailout by neighboring Abu Dhabi and "internal Dubai Government resources."

The plan offers creditors full repayment on the principal of their outstanding loans over a five to eight year period by issuing new debt. It was not clear how much interest, if any, is being offered, but Dubai World's chief restructuring officer said Thursday the debt would not be backed by the Dubai government.

Investors in Dubai welcomed the news. Shares on the city-state's main stock exchange, the Dubai Financial Market, shot up 4.9 percent in early trading. Shares of DP World, Dubai World's publicly traded port operator, rallied over 4 percent to trade at 50 cents apiece on the Nasdaq Dubai, another exchange in the emirate. Other Gulf markets also posted gains, reflecting investors' relief over concerns Dubai's debt woes could harm its neighbors.
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