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Abu Dhabi bails out neighbour Dubai

Abu Dhabi bails out neighbour Dubai
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The troubled finances of Dubai have been given a 10 billion-dollar boost from neighbouring Abu Dhabi.

While Abu Dhabi’s oil revenues mean its pockets remain deep, Dubai’s construction-heavy economy has been pushed by the credit crunch to the brink of bankruptcy.

Of the 10 billion dollars, (6.8 billion euros) just over four billion dollars will go to Nakheel, part of the state-owned Dubai World group.

Dubai World will use that to pay an Islamic bond, or sukuk, which is due today.

When Dubai asked creditors last month to freeze around 26 billion dollars (around 18 billion euros) worth of its debt, global markets plummeted. But news of the Abu Dhabi bail out saw Dubai’s bourse open over 10 percent up on Monday.