Abu Dhabi gives $10bn to Dubai

Dubai’s government has said it has received $10bn from Abu Dhabi to help it repay an Islamic bond and fund the troubled property developer Dubai World.

The announcement on Monday came as Nakheel, the property development unit of the Dubai World investment fund, was due to settle the $4.1bn bond.

The move by Abu Dhabi follows weeks of uncertainty in Gulf stock markets prompted by Dubai World’s request on November 25 for more time to pay $26bn in debt.

Al Jazeera’s Dan Nolan, reporting from the Gulf Co-operation Council summit in Kuwait City, said that while it had been expected that Abu Dhabi would help its Emirati neighbour, the scale of the assistance was a surprise.

‘Nothing for Abu Dhabi’

“Nobody was expecting that this $4.1bn Islamic bond that was maturing today would actually be paid in full,” he said.

“Abu Dhabi said just a few days after this story broke that they would not be writing any blank cheques, and that they would be choosing when and where they wanted to assist.

“What has been announced so far has not involved any obligations on Dubai to Abu Dhabi. Abu Dhabi will get nothing from this, other than stabilising Dubai when it was needed.”

“Dubai World is really a model of overambitious building. When the financial tsunami hit the global markets, there was really no market for expensive apartments and these massive office buildings [in Dubai]”

Francis Lun, general manager of Fulbright Securities
Sheikh Ahmed bin Saaed al-Maktoum, the chairman of the Dubai Supreme Fiscal Committee, earlier said in a statement: “The government of Abu Dhabi has agreed to fund $10bn to the Dubai Financial Support Fund that will be used to satisfy a series of upcoming obligations on Dubai World.”

“As a first action for the new fund, the government of Dubai has authorised $4.1bn to be used to pay the sukuk [Islamic certificate] obligations that are due today.”

Christopher Davidson, a senior lecturer at Durham University’s school of government and international affairs and a writer on the UAE, said that “traditional politics” was behind the agreement between Adu Dhabi and Dubai.

“Some kind of negotiation or an agreement was in place, but of course it took place behind palace doors,” he said.

“The general public and the investor community will never really understand what happened, but as far as they are concerned, the UAE is now acting as one.”

Dubai’s stock market opened up 10.10 per cent on Monday, after news of Abu Dhabi’s grant was announced. Abu Dhabi’s market was trading about seven per cent higher.

The yen fell sharply against other currencies on the news, while the US dollar increased to 88.90 yen and the euro also jumped to 130.43 yen.

Hong Kong’s Hang Seng index rose in the last minutes of morning trade to finish in positive territory, while other markets across Asia also received a boost.

“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,” al-Maktoum said in the statement.

“Dubai is, and will continue to be, a strong and vibrant global financial centre. Our best days are yet to come.”

‘Overambitious building’

But Francis Lun, general manager of Fulbright Securities, told Al Jazeera that Dubai had to re-examine its projects in order to make them viable.

“Dubai World is really a model of overambitious building. When the financial tsunami hit the global markets, there was really no market for expensive apartments and these massive office buildings [in Dubai],” he said from Hong Kong.

Dubai has struggled to complete some of its building projects amid the financial crisis [AFP]
“Who will live there, who will do business there? The problem is that maybe they will have to scale down their projects massively. I think it will take years, if not decades, for the buildings to be completed and fully occupied.”

Any excess funds from Abu Dhabi’s grant would help cover Dubai World’s obligations up until the end of April 2010, the statement said.

Dubai has announced a bankruptcy law that can be invoked if Dubai World and creditors fail to reach an agreement on debt maturing in the future.

“Dubai will announce a comprehensive reorganisation law, a framework that is based upon internationally accepted standards for transparency and creditor protection,” al-Maktoum said in the statement.

“This law will be available should Dubai World and its subsidiaries be unable to achieve an acceptable restructuring of its remaining obligations.”

The assistance provided to Dubai by Abu Dhabi, the largest member of the United Arab Emirates federation, is an attempt to stabilise regional markets and reassure potential investors that the UAE as a whole is on a sound financial footing, Al Jazeera’s Nolan said.

“Since this news [of Dubai World’s defaults] first broke a few weeks ago, Abu Dhabi’s stock markets have been hammered just as badly as Dubai’s.

“All of the Gulf nations have been affected. At the Gulf Co-operation Council summit in Kuwait there will be some happy faces, because they have a vested interest in Dubai – not only in terms of their own stock markets, but also because of the future financing of their own projects that are in the pipeline.”

References: http://english.aljazeera.net/news/middleeast/2009/12/2009121454243401178.html

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Al Zehra Medical Center: This hospital is created by medical project company at 1980. this is general surgical and dental hospitals with 100 bed in hospital and 22 services. its physical location is P.O.Box: 3499, Shariah, UAE along with telephone number+971 6 561 9999. Its website is http://www.alzahra.com.

Dubai Hospital: this is part of Dubai government’s department of health and medical services. it is general surgical and dental hospital with 625 beds. it was built at 1977 and came to action in 1983, Its website is http://web.dohms.gov.ae/dh

Al Noor hospital: This hospital is established at 1985 with facilities of In-patient and Out-patient services for 24 hrs. this is private organization with medical-surgical services. In 1998, this is awarded by Bureau Veritas Quality International for ISO Accreditation under ISO 9002:1994. its physically location isP.O.Box : 48481 with telephone number +971 2 4446655 and official website http://www.alnoorhospital.com.

Nile Badrawi Hospital: Established 1985, this hospital is working as private organization in Cairo city of Egypt. With 138 beds and 7 units centers, this provides 24 hrs services to civil of Cairo city. there is oncology department with three treatment surgery, radiotherapy and chemotherapy. Its physical location is Kornish EL-Nile Maadi road Cairo-Egypt, P.O.Box: 533 with contact number (202)- 25240349, (202)- 2524034, (202)- 25240022 and (202)- 25240025. Its website ishttp://www.nilebadrawi.com.

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