May 11, 2009 / 1:01 PM / 11 years ago

UPDATE 1-Dubai's Nakheel gets government cash injection

* Says receives funds from Dubai bond

* Looks to complete projects, pay outstanding obligations

(Adds Nakheel statement, background)

By Jason Benham

DUBAI, May 11 (Reuters) - Nakheel, the state-owned developer of the emirate’s palm-shaped islands, is receiving funds from the Dubai government, as it looks to complete projects and pay outstanding obligations, it said on Monday.

“We have benefited from an injection of capital from the bond issue,” Nakheel said in a statement, referring to a government bond sale earlier this year.

“The value and other details relating to this funding remain confidential,” it added.

Dubai property prices have tumbled since late last year, when the global financial crisis and a slump in oil prices ended an economic boom in the Gulf region.

Dubai sold $10 billion of bonds to the United Arab Emirates central bank in February to raise funds to support state-linked companies suffering from the crisis. It plans to issue another $10 billion of bonds later this year.

Several Dubai-based contractors have said they are owed hundreds of millions of dirhams by state-linked developers and some may face bankruptcy as credit dries up.

Nakheel is to hold talks with the owners of $4 billion of its debt as it looks to refinance or restructure borrowing, and has hired U.S.-based market intelligence firm Ipreo to locate the bond holders, London-based magazine MEED said last month.

“The market is assuming it is looking to restructure the bonds, but this is just one option. I don’t think you can evaluate all options until you know who the bond holder is,” Abdul Kadir Hussain, chief executive of Mashreq Capital, told Reuters last week.

Dubai’s Emaar Properties (EMAR.DU), the largest-listed UAE developer, has no need for financial support from the government, its chairman Mohamed Alabbar said late last month.

Additional reporting by John Irish; Editing by Erica Billingham

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