Dubai takes $10 bln from Abu Dhabi
Abu Dhabi has bailed out neighbouring Dubai with 10 billion in surprise assistance for debt-laden Dubai World, which said it would use 4.1 billion of it to repay its Nakheel units Islamic bond maturing on Monday.
The government of Dubai held a conference call on Monday to discuss the deal with a government source taking questions.
Abu Dhabi and Dubai are indisputably working as partners here to find a good, equitable solution to the Dubai World situation. The key part is buying time to let Dubai World and creditors the opportunity to come together on reciprocal restructuring.
There are no conditions. This is a government-to-government fund, the terms of that fund are inside to the government of Abu Dhabi and Dubai. These funds are especially for Dubai World.
I wont go into specifics. There is no conditionality. Abu Dhabi has made it clear it is there to hold up Dubai, Dubai World and I wont go into specifics of how the money is being handed. Whats momentous is we have two partners that is going to help each other and help the UAE (United Arab Emirates).
The government of Dubai has been in consultation for some time with bankruptcy professionals and world judges to develop a framework that is transparent, equitable and acceptable to all parties.
The recent UAE bankruptcy laws are largely untested and (their) administration by Dubai courts poses certain challenges and problems for a big and complex bankruptcy of this size.
These (new) laws should let Dubai World, should it choose it to use the laws to reach its restructuring and remaining obligations should it not find a reciprocal restructuring with its creditors.