Dubai World gets $9.5 B bailout

By the CNN Wire Staff


DUBAI, United Arab Emirates (CNN) -- The Dubai government announced plans Thursday to inject $9.5 billion in funding to help out its state-owned holding company, Dubai World.

Dubai World shocked investors around the world in November when it asked for a freeze on payments owed on its $23.5 billion in debts.

Of the $9.5 billion infusion announced Thursday, the lion's share -- $8 billion -- will go toward full repayment of bonds belonging to Dubai World's property development arm, Nakheel.

The government did not address the rest of the outstanding debt: $14.2 billion. It said creditors may have to wait five to eight years for the amount to be paid out in full.

Dubai said that $5.7 billion of the announced infusion is leftover money from a $10 billion loan from the neighboring emirate, Abu Dhabi.

The remainder of the money -- $3.8 billion -- will come from "internal government resources," Dubai said without elaborating.

The plan does not include any additional funding from the federal government.

The Dubai Financial Market shot up more than 4% as it regarded the announcement as a positive step.

Dubai is the most populous of the seven emirates that comprise the United Arab Emirates. Its holding company, Dubai World, is at the center of Dubai's thrust to diversify its economy into property, leisure and investment.

Its best known arm is Nakheel, the property developer behind the Palm Jumeirah and World archipelagos of man-made islands built for the super-rich.

When Dubai World asked for a freeze on debt payment in November, it delivered a cold dose of reality to speculators worldwide who believed the oil rich region was impervious to the global financial crisis.

-- CNN's Leone Lakhani and Victoria Brown contributed to this report. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.78%3.79%
15 yr fixed2.98%2.93%
5/1 ARM3.06%2.99%
30 yr refi3.85%3.85%
15 yr refi3.05%3.00%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 18,080.14 21.45 0.12%
Nasdaq 5,092.09 36.02 0.71%
S&P 500 2,117.69 4.76 0.23%
Treasuries 1.92 -0.03 -1.54%
Data as of 8:17am ET
Company Price Change % Change
Microsoft Corp 47.87 4.53 10.45%
Apple Inc 130.28 0.61 0.47%
Comcast Corp 59.64 0.41 0.69%
AT&T Inc 34.01 -0.22 -0.64%
Xerox Corp 11.99 -1.15 -8.75%
Data as of Apr 24
Sponsors

Sections

A major earthquake was the last thing Nepal needed. Even before one of the country's major fault lines rumbled to life, the country was beset by challenges. More

Stars of Youtube, Vine, Snapchat, and Twitter are attending this year's White House Correspondents' Dinner. More

A Girl Scouts Cookie Oven rolling out to Wal-Mart, Target, Kmart stores this summer will let you bake those iconic thin mints right at home. More

Imagine having a three-day weekend every week and being paid the same full-time salary. It can be done if your employer offers you the option of a compressed workweek. More