Dubai’s Nakheel pays $1.36bn to trade creditors

  • Share via facebook
  • Tweet this
  • Bookmark and Share

Nakheel, the real estate arm of debt-laden conglomerate Dubai World has paid AED5bn ($1.36bn) in overdue payments to its trade creditors, the company said Sunday.

The developer, which is seeking to delay some $10.5bn of debt, said last week it had won near-unanimous approval from trade creditors representing 95 percent of the debt.

“[The payment] marks significant progress in our recapitalization plan, following on from the initial payments to trade creditors of AED 500,000 or less, which commenced in March 2010,” the company said in an emailed statement.

Under Nakheel's restructuring proposal, trade creditors will receive repayment through 40 percent cash and 60 percent in the form of an Islamic bond, or sukuk.

Nakheel was one of the biggest casualties of Dubai’s real estate downturn, which saw prices halve from their 2008-peak and almost half of developments in the emirate cancelled.

The developer's inability to meet its debt obligations in the wake of a property collapse and the global credit crunch, helped trigger Dubai's debt crisis in 2009.

The company said in May it expected to conclude its debt restructuring by the end of the first half, and would be carved out of parent company Dubai World to become a state-owned entity.

Company CEO Chris O'Donnell left Nakheel earlier this month after five years at the helm.

Nakheel’s troubled offshore development The World is set to see its first island open to the public this year with the launch of The World Island Beach Club, Arabian Business reported last week.

Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

Posted by: Red Snappa

Perhaps this should be qualified in that Nakheel has now paid up to AED 5bn ($1.6bn) not in a single hit. This is progressive they had paid up to AED 4.6bn ($1.25bn) by 29th March this year and earlier than that they had paid up to $1.066bn to trade creditors by January.

That's part of the 40% cash pre-bond issue payment, but nobody seems to have published what the total 40% actually amounts to? Also the latest news floating around is that the sukuk for the reaining 60% owed to trade creditors is now being offered to the secondary market at 25% discount of face value for cash, is that true?

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Facelift or folly: Belgrade braces for Dubai-style makeover

Facelift or folly: Belgrade braces for Dubai-style makeover

Construction for the Belgrade Waterfront project is due to kick...

How potential loopholes could limit impact of Saudi land tax

How potential loopholes could limit impact of Saudi land tax

Move aims to help the government meet promises to build 500,000...

Top 40 most powerful architects in the Middle East

Top 40 most powerful architects in the Middle East

Our annual shakedown of the region's 40 most influential and...

Most Discussed
  • 17
    Nakheel PR: The toughest job in Dubai?

    You forgot to mention the sewage pit between JLT and Jumeirah Park and the terrible landscaping in Jumeirah Park The chain link fencing they want to install... more

    Monday, 30 March 2015 9:05 AM - An Emaar Fan
  • 14
    Dubai Int'l T1 is too congested, says Indian airline boss

    Question: All you people, criticizing my comment, do you work for Air India by any chance?

    Additionally, for all the whiners, I will provide you... more

    Tuesday, 31 March 2015 12:50 PM - Mosa
  • 9
    Post traumatic stress?

    I once had a Emirates Post employee hang up on me when I asked her to repeat something. That said, the worst is my management company, Kingfield Management... more

    Sunday, 29 March 2015 6:07 PM - Sarah