Dubai World Group’s property arm is responsible for The Palm Island and The World.

The Dubai Government has announced a rescue package worth around $10 billion (£6.13bn) to help stabilise the Dubai World Group and save it from defaulting on its $4.1bn Islamic bond.

The money will include the full repayment of the Nakheel 2009 sukuk – Dubai World’s property arm which has built the luxury The Palm Island and The World developments.

Earlier this month shares on Dubai’s stock market began to fall amidst fears over the size of the debt in the Emirates – with particular emphasis on Dubai World which announced at the end of November it needed to stall payments to creditors.

Stock markets across the world felt the repercussions of the news, with European indexes falling around 3% following the Group’s announcement.

However, yesterday (13 December) the Dubai World Group – which claims to be Dubai’s “flag bearer in global investments” – said on its website: “Dubai World will continue to work with financial creditors to negotiate a standstill in an orderly way.

“As long as a standstill is successfully negotiated, Dubai World has assurances that the Government of Dubai will provide financial support to cover working capital and interest expenses to ensure the continuity of key projects.”

The Group said it was pleased that the Government had intervened to alleviate the concerns of trade creditors and contractors.
 
Deloitte, Rothschild and Clifford Chance are among the advisors which have been appointed to assist Dubai World through the restructuring process.

The Group said that its Drydocks World and subsidiaries were immune from the restructuring process as it had managed the global economic downturn successfully.