Abu Dhabi moved to ease Dubai's troubles by extending a $10bn bail-out to its neighbour on Monday.
The financing is expected to shore up Dubai property development company Nekheel, which was due to settle a $4.1bn sukuk bond on Monday. Abu Dhabi’s decision to lend its support to Dubai saw the region’s markets rally following weeks of uncertainty over the emirate’s financial problems.
Concern was raised, however, over Nekheel’s parent company Dubai World, which helped to fund MGM Mirage’s CityCenter in Las Vegas. The group recently announced that it was seeking ways of restructuring its debts, estimated to be in the region of $26bn. Analysts have suggested that the crisis may have damaged Dubai’s reputation as a centre for business.
