State-owned real estate and ports conglomerate Dubai World is to receive $9.5 billion to help satisfy its debt obligations under a recapitalisation plan announced by the Dubai government today.
The plan includes providing $5.7 billion in funds remaining from the financial aid provided by neighbouring emirate, Abu Dhabi, as well as other state resources, news agencies reported.
According to Reuters, a Dubai government spokesperson said: “There is no new money from Abu Dhabi. This proposal is based on amounts remaining from the loans provided previously by the government of Abu Dhabi and from internal resources from the government.”
Dubai World’s debt is reported to be $14.2 billion currently although this excludes support from the Dubai Financial Support Fund, a vehicle constructed to meet the debt obligations of the state.
The company said it would repay 100 percent of the principal capital of its borrowings via two new vehicles which expire in five and eight years respectively.
The measures are the latest efforts to steady the state-owned conglomerate which rocked world markets last November when it stated it would seek to delay paying back its then-$26 billion debt pile for six months.
Dubai World’s inability to repay its debts came, in part, as a result of the loans its real estate subsidiaries, including Nakheel Holdings and Limitless, used to finance large and expensive domestic projects.
According to a report by Bloomberg, Dubai World owes money to more than 90 banks including HSBC Holdings, Royal Bank of Scotland, Lloyds Banking Group, Standard Chartered and Bank of Tokyo-Mitsubish as well as some Dubai-based banks.