Dubai's mistakes add up

18 January 2010 By Una Galani Follow @ugalani

The emirate is getting $5 bln less aid from Abu Dhabi than the $15 bln previously assumed, but that doesn’t undermine the $10 bln pledge to Dubai World contingent on a standstill. The communications error exposes a chaotic restructuring; creditors remain just as stuck as before.

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Dubai's $10 billion of financial aid from Abu Dhabi announced in December included $5 billion previously lent to the emirate by two Abu Dhabibased banks, a spokesperson for the Dubai government confirmed.

In November, Al Hilal Bank and the National Bank of Abu Dhabi subscribed to a $5 billion bond issued by the Dubai government. The funds were allocated to the Dubai Financial Support Fund.

In December, the government said "Abu Dhabi has agreed to fund $10 billion to the Dubai Financial Support Fund that will be used to satisfy a series of upcoming obligations on Dubai World".

The government used $4.1 billion immediately to repay an Islamic bond and said that the "remaining funds would provide for interest expenses and company working capital through April 30, 2010" providing Dubai World reached a standstill agreement with creditors.

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In November, Al Hilal Bank and the National Bank of Abu Dhabi subscribed to a $5 billion bond issued by the Dubai government. The funds were allocated to the Dubai Financial Support Fund.

In December, the government said "Abu Dhabi has agreed to fund $10 billion to the Dubai Financial Support Fund that will be used to satisfy a series of upcoming obligations on Dubai World".

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