Dubai in talks with Abu Dhabi
Just don't call it a bailout.
FT:
FT:
Dubai is in talks with the United Arab Emirates government over a loan facility that would make state funds available to companies as international sources of capital dry up.What strings would be attached? Would Abu Dhabi get an equity stake in Dubai, Inc.?
The plan, one of several options under discussion by the authorities, would draw on support from the cash-rich federal government, bankrolled by Abu Dhabi, the capital that also owns 90 per cent of UAE oil wealth.
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According to officials in Dubai, the terms of the facility have yet to be defined but it would be likely to lend to companies that need help refinancing existing debt.
The economic crisis has highlighted the inter-dependence of the seven emirates that make up the UAE, and the crucial role of the federal government, which has at times been overshadowed by the rivalry between the trade and commerce hub of Dubai and Abu Dhabi, the oil town that now has its own ambitions to diversify its economy away from oil.
posted by John B. Chilton at 11/19/2008 06:41:00 AM
3 Comments:
In the old days it used to be Qatar or Kuwait who would support Dubai Government financially, today it's a diffrent chapter as all of these governments has grown up; it's time for closer relations to proof that the federation system works out for economic reasons.
Rumors here abound that Abu Dhabi would want a major stake in Emirates Airline as part of any 'bailout' deal.
I've heard several rumors related to that - one was that Etihad already owned 25% of Emirates in exchange for some walking-around money for Shk. Moh'd.
Another says that work on the Burj Dubai has come to a stop due to a shortage of funds.
Believe me, things are hitting here now...
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