Nakheel sukuk to be issued ‘within months’, says Atkins boss

Debt-hit developer is ‘credible’ and ‘very sound’, says chief executive Keith Clarke
Nakheel sukuk to be issued ‘within months’, says Atkins boss
Debt-hit Nakheel is the developer behind the iconic Palm project in Dubai
By Elizabeth Broomhall
Thu 31 Mar 2011 10:40 AM

Atkins, the world’s largest engineering and design consultancy, expects to receive an Islamic bond in part payment from Nakheel within a few months, its chief executive said.

The firm is “very confident” the state-developer will meet its debt obligations and expects the sukuk to grow significantly in value over time, Keith Clarke said.

Under Nakheel's restructuring proposal, trade creditors will receive repayment through 40 percent cash and 60 percent in the form of an Islamic bond, or sukuk.

“We are very confident that the sukuk will be issued and that it will be worth some money. In due course it will be worth a lot of money,” Clarke said in an interview with Arabian Business’ sister title, Construction Week.

“We haven’t had any issues at all, and we expect to receive the bond in the next few months.”

Nakheel, the real estate arm of debt-laden conglomerate Dubai World, said Tuesday it had paid AED4.6bn ($1.25bn) in overdue payments to its trade creditors.

The firm said it expects to secure the agreement of trade creditors representing 95 percent of the debt by the end of the first half, months later than the Q1 deadline it promised in January.   

The state-linked developer is seeking to restructure $10.9bn in debt.

Nakheel was at the centre of Dubai's real estate boom with projects such as islands in the shape of palms and a map of the world.

The developer's inability to meet its debt obligations, in the wake of a property collapse and the global credit crunch, helped trigger Dubai's debt crisis in 2009.

UK-based Atkins is among a number of international design consultancies still awaiting payment from the firm, including Halcrow, EC Harris, Hyder, Mouchel and WSP.

“We regard the restructure as the normal restructuring of a company that you’d see anywhere else in the world,” Clarke said.

“Actually I think Nakheel will come back as a very credible and sensible developer. I think it is a very sound group.”

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