The Abu Dhabi government is set to step in with $5.2bn of assistance for Aldar by buying assets and issuing bonds as the developer struggles to meet debt repayments amid a weakening real estate market in the capital of the United Arab Emirates.
Just over a year after extending a $10bn lifeline to Dubai’s government-owned developer Nakheel and its parent Dubai World, oil-rich Abu Dhabi has been forced to channel its wealth back into its own struggling property sector.
Abu Dhabi stepped in with a significant capital injection into its banks in 2009, but the rescue of Aldar is the first major public bail-out of a state-linked entity in the emirate.
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