The Dubai government has pumped $6.2 billion (around Rs 28,970 crore) into Dubai World and is prepared to put even more money into the conglomerate whose debt woes caused global market jitters late last year.
The Dubai Financial Support Fund (DFSF), set up in February last year to aid indebted state-run corporations, “has put over $6.2 billion into Dubai World Group over the past 12 months,” a government spokesperson said.
“The DFSF stands ready to put considerably more money into the company in line with the announcement it made” in December, when the government forked out $4.1 billion to cover maturing bonds owed by Nakheel, the property arm of Dubai World, the spokesperson said.
Dubai was able to rescue Nakheel from an imminent default thanks to a last-minute lifeline from Abu Dhabi, which brought Abu Dhabi’s total financial aid to Dubai since the global financial crisis hit the emirate to $10 billion.
Although Dubai World is owned by the government, the spokesperson stressed that the funds were extended on a commercial basis. “These funds would be used for, among other things, working capital and interest expenses for the company’s creditors.”
Dubai World began negotiations with creditors in December to restructure some $22 billion in debt owed by its troubled subsidiaries. So far, no agreement has been reported.