|
|
| |
Abu Dhabi to the rescue!
| After a few days of tension on the international stock exchange, Abu Dhabi announced that it will rescue its neighbor emirate Dubai. |
 |
The downfall of Dubai provoked a bad feeling for all stockholders who feared another financial crisis. Nevertheless, the oil-rich neighbor Abu Dhabi proposed $10 billion to the emirate for it to face its creditors.
Emirates authorities announced that they had attributed $4.1 billion to Nakheel’s debt which reached maturity Monday the 14th. This announcement intervened the same day that Nakheel’s Islamic obligations (Sukuk) reached maturity, which calmed financial sector that feared a non-payment.
The announcement also provoked a positive reaction in Abu Dhabi and Dubai stock exchange that closed positive respectively 10 % and 7 %.
Emirates authorities have explained during a press release that the other $5.9 billion “will help paying the interest rate and cost of Dubai’s World management. The release stresses that the payment will be attributed if the group succeeds in negotiating the debt moratorium as announced earlier”.
Sheikh Ahmed Ben Said Al-Makhtoum, president of the supreme fiscal comity put in place in July to help running the impact of the global financial crisis gave more details on this rescue operation. He explains that “Dubai government announced that the rest of the help will help to honor Dubai World’s commitment for its actual creditors and entrepreneurs”.
He added that “a legal framework was founded on international standards by Dubai’s government for concern transparence and to protect creditors (…) in case Dubai World and its branch offices don’t build an acceptable restructuration of its commitments”.
UAE’s Central banks concluded by reassuring the different anxious investors by affirming that “we are ready to help emirate local bank”.
Beirut
16-12-2009
Karl Soued
Ebizproduction
|
|
|
|
