Dubai's government said on Wednesday $10 billion in bond proceeds from the UAE central bank would be enough for now to help the emirate's companies pay off debts and restructure to deal with a real estate slump. The Gulf Arab trade and tourism hub is ready to issue a second $10 billion tranche when needed, and was considering launching a stimulus package for small and medium enterprises, the director-general of Dubai's Department of Finance said.
Real estate companies in Dubai, where the property sector has crashed after a six-year boom, would be among the main beneficiaries of state aid, Nasser al-Shaikh said, declining to say how much debt Dubai firms would repay in 2009. "We understand that some entities might face difficulties in refinancing because of the global credit crisis.
The times are challenging throughout the world. Now it is up to us," he told a media briefing in Dubai, part of the seven-member United Arab Emirates federation, a major oil exporter. "By protecting the major players in our economy, automatically we are protecting our economy." Dubai's decision this week to sell $10 billion in bonds to the UAE central bank alleviated worries it could default after concerns had driven the price of insuring the debt of some Dubai firms to levels exceeding those of crisis-hit Iceland.
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