Indebted developer says will ask to delist from Nasdaq Dubai following payment of debt
Troubled property developer Nakheel said on Thursday that it would repay its $750m Islamic bond that matures next month, following funds being made available by Dubai.
The company said in a statement to emirate's bourse that sufficient funds has been made available by the Dubai Financial Support Fund for repayment of the Islamic bond that is due on Jan 16, 2011.
The builder of man-made islands off the coast of Dubai, said with this sukuk payment it would have repaid all previously issued sukuk and would request the Nasdaq Dubai bourse to delist them.
Abdul Kadir Hussain, chief executive of Mashreq Capital in Dubai said that the payment of sukuk was expected by the market.
"The fact that the payment would be made by Dubai's financial support fund was also known since Nakheel was not expected to have the money to make the payment themselves," said Hussain.
"It is another positive development for Nakheel and there are no surprises and last-minute volatility when it comes to repayment like before.
The indebted developer on Wednesday said that 91 percent of its trade creditors have agreed to its $10.9bn restructuring proposal.
Nakheel, whose debt troubles forced its parent company Dubai World to announce a shock debt delay last year, is struggling to negotiate terms with contractors who hold the keys to its many delayed projects.
"I think they are making a slow but steady progress in the completion of restructuring. They seem to keep on hitting milestones, though in a slow manner. Once the creditor's debt situation is also resolved, that should help them turn their focus towards some of the pending projects," said Hussain.
The emirate's property sector was hardest hit by the economic recession, with billions of dollars worth of projects put on hold or cancelled while financing for real estate projects all but dried up.