Wednesday 16 December 2009

Unpaid contractors join queue for Dubai’s cash

For more than a year, international and local contractors working on Dubai’s vast array of real estate developments have borne the brunt of the emirate’s financial woes as billions of dollars of bills have gone unpaid.

All work on numerous grandiose projects has duly ground to a halt. Now, however, they may find reason for cheer, as much of the $10bn (€6.9bn, £6.2bn) loan from Abu Dhabi to its neighbour, announced on Monday, has been set aside for outstanding bills.

Some $4.1bn will be used to repay a bond issued by Nakheel, the real estate wing of Dubai World, which triggered the crisis by trying to restructure $26bn of debt. Those funds were sent to the principal paying agent on Tuesday, a company statement said, helping Dubai avoid an embarrassing default and stemming the contagion effect of the emirate’s travails.

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