ABU DHABI, (Reuters) – Dubai, which is gearing up to give creditors a plan on repaying $26 billion in debt, is not likely to need more help from the United Arab Emirates central bank, its governor was quoted as saying on Monday.
In an interview with Bloomberg, Sultan bin Nasser al Suweidi said state-owned conglomerate Dubai World’s debt proposal would treat all banks equally and that local banks will be able to bear the brunt of any “haircuts”. “They haven’t discussed this issue with us and I don’t think it will be necessary,” Suwaidi said in response to a question on whether Dubai will need further federal support.
In February 2009, the UAE central bank took up $10 billion in a $20 billion sovereign bond programme launched by Dubai. Proceeds from the programme were earmarked for strategic state-linked firms. Dubai World is in talks to renegotiate debt linked mainly to its property units Nakheel and Limitless World.
The company announced it would request a six-month delay on repaying the funds last November. It staved off default on a $4.1 billion Islamic bond linked to Nakheel in December, after a last minute bailout from Abu Dhabi.