Published: March 25, 2010
Emirate’s government bails out stricken property group.
Nakheel, the trouble property arm of the Dubai government’s investment vehicle Dubai World, has announced a debt restructuring that will see its creditors repaid in full and its near term development projects completed.
The Dubai government is pumping US$8bn into Nakheel to pay down its debts and fund its business. Its Dubai Financial Support Fund will also covert an existing US$1.2bn debt claim in Nakheel into equity.
The government’s support is conditional on approval from creditors.
News of the deal on Thursday morning sent the price of Nakheel’s bonds up and the cost of insuring Dubai World’s debt down.