Dubai shares rise as Nakheel reaches accord with trade creditors

UPDATE 3: Emaar Properties, UAE's biggest property developer, gained the most since Nov 9
Dubai shares advanced the most in four weeks as Nakheel (Getty Images)
By Reuters
Wed 29 Dec 2010 11:15 AM

Dubai shares advanced the most in
four weeks as Nakheel, the developer of palm-shaped islands off the emirate’s
coast, said it reached an accord with 91 percent of its trade creditors to
alter terms on debt payments.

Emaar Properties, the UAE’s biggest
property developer, gained the most since November 9. Union Properties, Dubai’s
third-largest real-estate developer by market value, rose 2 percent.

Dubai’s DFM General Index climbed
for the first time this week, gaining 1.1 percent to 1,621.70 at the 2 p.m.
close in the emirate. The measure has lost 10 percent this year and is headed
for its worst annual performance since 2008.

The announcement “means that most
probably the debt restructuring will go smoothly without any legal issues,”
said Mohamed Khaled Hafez, relationship manager at Prime Emirates in Abu Dhabi.

Nakheel is renegotiating debt terms
after the deepest financial crisis since the 1930s roiled Dubai’s real-estate
market and left companies unable to raise money. The Dubai government-owned
company said today it’s working to “achieve the required 95 percent
restructuring threshold.”

“Ninety-one percent by value of
trade creditor accounts payable has been finalised in signed restructuring
undertakings,” Nakheel said in an e-mailed statement.

Dubai World, the parent of Nakheel
and one of Dubai’s three main holding companies, in October gained approval
from all its creditors to change terms on $24.9 billion of loans.

Emaar climbed 2.1 percent to 3.46
dirhams. Union Properties gained the most since December 1 to 36.5 fils. Depa
Ltd. increased 2.9 percent to 72 cents, the highest in two weeks. The interior
design contractor that fitted out the world’s tallest tower in Dubai won a
contract valued at 72 million dirhams ($19.6 million) for works on the Yasmeen
Rotana Hotel in Damascus.

Qatar’s gauge advanced 0.2 percent
and Kuwait’s SE Price Index rose 0.3 percent. Oman’s MSM 30 slipped 0.1
percent. Bahrain’s measure and Abu Dhabi’s ADX General Index were little
changed, decreasing less than 0.1 percent. Saudi Arabia’s Tadawul All Share
Index increased 0.1 percent.

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