Dubai asks Rothschild for $10bn

Dubai on Thursday said it had appointed Rothschild to advise the government on the creation of a financial support fund for state-linked entities worth at least $10bn.

Dubai Pyramid

The government has borrowed $10bn from the United Arab Emirates central bank as part of a broader $20bn bond programme and plans to use the cash to help companies owned or linked to the government refinance debts and settle bills.

The fund will provide financial support to these companies while "facilitating reforms ... to protect the long-term viability of these entities," the government's department of finance said in a statement.

"The establishment of the fund will be an important step towards bringing greater stability and confidence to the revised business plans of our state-affiliated entities, especially in the real estate sector," said Nasser al-Shaikh, director-general of the department of finance.

State-linked entities are due to refinance billions of dollars of loans this year, while many are also facing problems in paying contractors as the economy is affected by a real estate crash and lower global demand owing to the worldwide downturn.

Mr Shaikh said the investment bank would help the government put in place a qualification and oversight process for the fund. More

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