The government of Dubai will put up to $9.5 billion into Dubai World and its subsidiary Nakheel PJSC to help them restructure debt, Dubai World said Thursday.
The Nakheel bonds falling due this year and next will be paid, Dubai World, which is the chief investment vehicle for Dubai, said in a statement.
Nakheel, the company’s real estate development unit, will receive about $8 billion in the new government funds.
In a statement, the unit said it would “work with its creditors over the coming weeks to secure agreement for the recapitalization plan. The support from the government is conditional upon this agreement.”
If a deal is reached, the government support would help Nakheel to complete work on near-term projects, said Chris O’Donnell, its chief executive.
The announcement comes about four months after Dubai World said it would need to renegotiate $26 billion in debt, which rattled markets worldwide. On Dec. 14, Abu Dhabi pledged $10 billion to Dubai to help repay a bond that was to mature soon.
more at http://www.nytimes.com/2010/03/26/business/global/26dubai.html
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