Dubai gets $10bn bailout fund from Abu Dhabi

A $10 billion (£6.1 billion) bailout fund has been provided by Abu Dhabi to Dubai to help it pay off its debts.

Dubai World, the government-owned investment company that recently said it wanted to put a halt to its debt repayments, will receive $4.1 billion of the cash.

It will be used to service the payment of an Islamic bond that was due to mature today (December 14th), but the funding is subject to Dubai World successfully managing to negotiate ’a standstill previously announced with remaining creditors’, a government source was quoted by Reuters as saying.

The unnamed representative added that the money will also ensure obligations with trade creditors are met, with talks set to start ’shortly’.

Bloomberg reports that the announcement helped shares in Dubai record the biggest two-day increase for over a year.

In addition, it also helped limit losses on the Nikkei 225 and push the FTSE 100 up by one per cent in morning trading.ADNFCR-2318-ID-19511956-ADNFCR