Nakheel "not in a hurry" to pay creditor claims - chairman

Ali Rashid Lootah says he expects creditors to accept up to 80 percent less than what they are owed
Nakheel chairman Ali Rashid Lootah.
By Staff writer
Wed 01 Aug 2012 08:56 AM

Nakheel chairman Ali Rashid Lootah said the indebted Dubai developer is "not in a hurry" to pay AED5bn (US$1.36bn) due in creditor claims, and expects contractors to accept up to 80 percent less than what they are owed.

Speaking to Gulf Business magazine, Lootah said the firm behind the Palm Jumeirah and the stalled The World projects had settled AED3bn out of a total claim of AED8bn from creditors. He added that he expects to lower the value of the remaining invoices to approximately AED1bn.

"The remaining big boys, they put the big figures, but we're confident it will be about the same [reduction]," Lootah said. "We expect to bring it down to not exceeding AED1bn total. We're patient. I'm not in a hurry to pay - if they want to settle, they have to be reasonable."

Nakheel was heavily involved in Dubai's 2008-2009 property crash that saw prices in the emirate plunge by up to 60 percent.  In August 2011 the developer completed around US$16bn in debt restructuring.

Earlier this week, the state-owned developer said its first-half profits jumped 36 percent, buoyed by property handovers on several projects.

Nakheel, whose extravagant developments at the height of Dubai's property boom contributed to the emirate's debt woes, has been slowly recovering from the crippling real estate collapse.

The developer said net profit was AED767m (US$208.82m) in the first six months of the year, up from AED562m in the year-ago period.

Revenues rose to AED3.1bn in the first half, up 112 percent from the corresponding period a year ago, it said in a statement.

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