Dubai developer Nakheel has been bailed-out by its government in a deal thought to be worth billions.
Nakheel, responsible for developing the Emirate’s famous palm-shaped islands, was said by analysts to be close to bankruptcy, and owing UK-based consultants up to £200M (see news 23 April)
However, the recent bond issue by the Dubai government, worth £13.3bn (US$20bn) was a success, with neighbouring Abu Dhabi buying half the offering.
According to a Nakheel spokesperson, “We have benefited from an injection of capital from the bond issue. The value and other details relating to this funding remain confidential.”
Numerous consultants had reported cash collection issues in the Emirate, thought to stem from a cashflow problems at Nakheel, which uses off-plan sales to fund ongoing construction. The model failed when Dubai’s housing bubble burst.
“We have benefited from an injection of capital from the bond issue. The value and other details relating to this funding remain confidential.”
According to a Nakheel spokesperson
Consultants had previously warned that allowing Nakheel to collapse would have damaged the reputation of the Emirate.