Dubai’s financial support fund, set up to help the emirate’s state-owned companies pay back debt, may need as much as $2.4 billion extra by 2012 to pay off maturing liabilities, according to JPMorgan Chase.
“We estimate that DFSF’s cash will get exhausted later this year or early next, and will have to be ‘topped up’ by $1.3 to $2.4 billion over the next two years,” Zafar Nazim, a London-based analyst at JPMorgan Securities Ltd, said in a report to clients yesterday. “We would expect capital markets to be the primary source of such fund-raising, although some asset sales cannot be ruled out.”
Dubai roiled international markets in 2009 when it announced plans to delay $24.9 billion in debt of its state- owned holding company Dubai World. The holding company, which has interests from real estate to industry, reached an agreement with more than 70 creditor banks to delay loan payments after property prices slumped in the emirate and frozen credit markets prevented it from raising new loans to repay older ones.
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