Dubai pledges to protect creditors

14/12/2009 - Dubai Investment News
Dubai pledges to protect creditors
Posted by Neil King

Investors and creditors with property interests in Dubai will be protected under new measures announced today.

The government of Abu Dhabi has agreed to fund AED 10 billion to the Dubai Financial Support Fund that will be used to satisfy a series of upcoming obligations on Dubai World.

As a first use for the new fund, the government of Dubai has authorised AED 4.1 billion to cover Islamic bonds issued by its Nakheel property developer.

"We are here today to reassure investors, financial and trade creditors, employees, and our citizens that our government will act at all times in accordance with market principles and internationally accepted business practices," said Sheikh Ahmed bin Saeed al-Maktoum.

Any excess funding will be used to cover Dubai World's needs until the end of April 2010.

In addition to the funding, the Dubai government has announced that it is prepared to provide support to local United Arab Emirates banks should Dubai World and its creditors fail to reach an agreement on debt maturing in the future.