UAE banks bail out 1,700 debt-hit firms

7 Days in Dubai - - NEWS -

An es­ti­mated 1,700 com­pa­nies in sig­nif­i­cant debt have been of­fered a life­line since the UAE’s banks in­tro­duced their own in­for­mal bank­ruptcy ar­range­ment ear­lier this year. The UAE Banks Fed­er­a­tion yes­ter­day said its mem­bers were able to put in place re­struc­tur­ing for a to­tal Dhs7 bil­lion of out­stand­ing loans for more than 1,700 SMEs and cor­po­rates. It fol­lows an agree­ment be­tween the banks in March to help busi­ness own­ers avoid col­lapse. It was also in­tended to limit the num­ber of busi­ness own­ers flee­ing the coun­try to avoid de­fault­ing on their debts – a crime un­der UAE law. As of last Novem­ber, the banks were col­lec­tively owed about Dhs5 bil­lion as a re­sult of own­ers ‘skip­ping’ the coun­try. The ar­range­ment came be­fore the an­nounce­ment of the UAE Bank­ruptcy Law ear­lier this month. Com­ment­ing on the new law, Ab­du­laziz Al Ghu­rair, Chair­man of the UAE Banks Fed­er­a­tion, said: “We com­mend and wel­come the leg­is­la­tion of the bank­ruptcy law, which the gov­ern­ment has recog­nised as a pre-req­ui­site for the coun­try’s eco­nomic de­vel­op­ment, and an es­sen­tial tool to main­tain the well-be­ing of the busi­ness and eco­nomic en­vi­ron­ment. “All banks were in­volved and re­spon­si­ble for con­sid­er­ing ev­ery op­tion to sup­port their clients, and help them stay in busi­ness and suc­ceed, es­pe­cially SMEs which rep­re­sent over 90 per cent of the coun­try’s non-gov­ern­ment GDP.”

SUP­PORT: Al Ghu­rair

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