Abu Dhabi In Talks With Dubai for Support Through State Fund Mubadala

The governments of Abu Dhabi and Dubai are discussing ways to prop up Dubai’s economy by linking up assets in the two emirates, with Abu Dhabi’s state fund Mubadala likely to play a key role in any deal, three sources familiar with the matter said, Reuters reported. Some economic sectors have come to a near standstill in Dubai during the coronavirus outbreak, and it faces its most severe downturn since a 2009 debt crisis. It lacks the oil wealth of Abu Dhabi to cushion the blow. Abu Dhabi bailed out Dubai after the 2009 crisis with a $10 billion government loan, which was subsequently rolled over, and $10 billion in bonds that Dubai issued to the central bank. One of the sources said any support from Abu Dhabi agreed now would be “orchestrated through mergers of assets where Abu Dhabi and Dubai compete directly or where they have joint ownerships”. “The most likely deal to happen in the near term is a merger of the local stock markets,” the source said, adding that bank mergers were also possible. Read more