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Dubai government’s first bail out payments expected within days

The Dubai Finance Department has confirmed that the first payouts are likely to be next week and a number of property firms have been in discussions since the bond was snapped up by the Central Bank when it was issued last month.

Nasser Bin Hassan Al Shaikh, director general of the Dubai Finance Department, was not able to give any details of specific companies but he said several Dubai based businesses were in negotiations over cash injections that could be in the form of extended loans.

The amount that companies will be able to access will depend on negotiations with those companies and an assessment of their needs on a case by case basis, Al Shaikh said.

'We understand that the cash flows of some companies have been affected and we might need to help companies with working capital,' he added.

Al Shaikh said that from a personal perspective, he expected to see more consolidation in sectors, including real estate, in the future.

It is widely believed that this sum should largely cover the emirate's refinancing needs this year, should the need to draw on funds occur. Estimates vary on how much is due for refinancing this year, but the Economist Intelligence Unit puts the amount at $13 billion.

There is growing concern about the ability of some major Dubai companies to refinance maturities with many repayments due in April.

Many developers have put major projects on hold and analysts have said they face a difficult re-financing round. There is also concern that the bailout money will go to the big companies leaving small and medium sized enterprises still struggling in the economic downturn.

However the Finance Department said that while it would only negotiate with the larger companies, some funds would be available to small and medium sized companies through the Department of Economic Development.