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Wed 26 Jan 2011 12:48 PM

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Nakheel says won't need additional Dubai government cash

Developer of palm-shaped islands hopes to issue Islamic bonds to its trade creditors in first quarter

Nakheel says won't need additional Dubai government cash
GOVERNMENT AID: Dubai’s government said in March last year it will provide $8bn in cash to Nakheel to help it pay contractors and complete stalled property projects. (Getty Images)

Nakheel, the developer of palm- shaped islands off Dubai’s coast, will not need additional commitment from the Dubai government, chairman Ali Lootah told reporters in Dubai on Wednesday.

Dubai’s government said in March last year it will provide $8bn in cash to Nakheel to help it pay contractors and complete stalled property projects. The government said it will also convert $1.2bn of loans to the company into equity.

Nakheel hopes to issue sukuk, or Islamic bonds, to its trade creditors in the first quarter, Lootah said. “We’re almost there,” he said.

“There were some bureaucratic procedures but we’re working so hard.” The company has no plan to sell shares to the public, he said.

The developer may issue as much as $3.2bn of five- year sukuk to pay contractors as part of its debt restructuring plan, JPMorgan Chase said in a report August 26.

Nakheel said on January 2 it paid a total of AED3.9bn ($1.06bn) to its trade creditors as it seeks approval to delay payments on at least $10.5bn of loans and bills.