By Ed Attwood
Troubled Dubai developer announces 91% trade creditor agreement, shy of 95% needed for debt deal
Troubled Dubai developer Nakheel on Wednesday said it has not yet managed to achieve a trade creditor agreement needed to complete its $10.9bn debt restructuring plans.
The debt-laden Dubai World subsidiary announced on Wednesday that it had restructured 91 percent of trade creditor debts, a little short of the 95 percent it requires.
Under the terms of Nakheel's proposal, trade creditors will receive 40 percent in cash and 60 percent repayment through an Islamic bond with a 10 percent return.
In October, Nakheel chairman Ali Rashid Lootah told reporters that the firm hoped to complete the process this year.
“Nakheel is pleased to announce that 91 percent [by value] of trade creditor accounts payable has been finalised in signed restructuring undertakings,” a Nakheel spokesperson said.
“We continue to work to achieve the required 95 percent restructuring threshold.”
Dubai’s government said in March it will provide $8bn in cash to Nakheel to repay trade debts and complete outstanding real-estate projects.
In September, Nakheel said it had reached 85 percent acceptance on its debt deal and had repaid trade creditors AED3.4bn ($930m). The figure reached 90 percent in October.
The company has since resumed work on real estate projects Al Furjan and Jumeirah Park.
Arabian Business reported in November that Nakheel was offering trade creditors early payment on outstanding debts in exchange for a cut on the amount due.
UAE conglomerate Easa Saleh Al Gurg Group, whose industry arm supplies materials to the construction sector, said Nakheel had pushed to renegotiate its debts with trade contractors, in exchange for a quick settlement.
“‘Give us a discount and we will finish your payment upfront,’ that is what [Nakheel] has got to say,” Abdullah Al Gurg, group general manager, told Arabian Business. “In some cases, yes they have [tried to renegotiate debts].
Nakheel declined to comment.
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