By Andy Sambidge
Developer's chairman says offer shows company's ability and commitment to all its payments
Developer Nakheel, restructuring $10.9 billion in debt, has offered lenders guarantees of real estate assets equivalent to the value of their loans, the company's chairman said.
Ali Rashid Lootah told local Arabic daily Al-Ittihad the offer aimed to boost lenders' confidence.
"It stresses the company's ability and commitment to all of its payments and financial dues under the time frame which both sides have agreed on," the newspaper cited Lootah as saying.
Nakheel, which overstretched itself building islands in the shape of palms and other ambitious projects, is part of state-owned conglomerate Dubai World. Dubai World recently completed a $25 billion restructuring with banks.
Nakheel held separate debt talks with its bank and trade creditors and will eventually be separated from Dubai World to become a full government subsidiary.
Earlier this month, the developer offered lenders repayment after four and a half years at a rate of 4 percent on part of its debt in a deal that favours banks, sources told Reuters.
The terms of the restructuring, covering mainly bilateral loans and one $1.85 billion syndicated Islamic loan due 2012, vary from the all-lender meeting in July which indicated repayment over five to seven years.
They relate to the syndicated loan, signed in 2007, which 22 banks participated in, one of the sources said, and an agreement could be close. Nakheel said in March it hoped to conclude its restructuring by the end of the second quarter.finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Perhaps they should do the same for disgruntled buyers ie if they do not deliver or eventually decide they cannot deliver a development, then provide another property as a back stop guarantee to the client in the meantime.
are the assets offered are worth while to hold or just again another piece of paper??