Dubai in talks with Abu Dhabi
Just don't call it a bailout.
Dubai is in talks with the United Arab Emirates government over a loan facility that would make state funds available to companies as international sources of capital dry up.What strings would be attached? Would Abu Dhabi get an equity stake in Dubai, Inc.?
The plan, one of several options under discussion by the authorities, would draw on support from the cash-rich federal government, bankrolled by Abu Dhabi, the capital that also owns 90 per cent of UAE oil wealth.
According to officials in Dubai, the terms of the facility have yet to be defined but it would be likely to lend to companies that need help refinancing existing debt.
The economic crisis has highlighted the inter-dependence of the seven emirates that make up the UAE, and the crucial role of the federal government, which has at times been overshadowed by the rivalry between the trade and commerce hub of Dubai and Abu Dhabi, the oil town that now has its own ambitions to diversify its economy away from oil.