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Nakheel Hopes for Major Deal to Occur Within Two Weeks

Dubai : 27 January 2011

As the property arm of Dubai World, Nakheel is talking with creditors seeking approval for a $10.5 billion plan of debt restructuring.

Chairman of Nakheel Ali Rashid Lootah, stated that a major contract should be announced soon. Lootah spoke at a media brief this week and stated that the official agreement and approval rate stands at 91 percent.

The firm requires 95 percent of trade creditors to agree with the debt restructure plan. In December the developer stated that more support had been won for the plan, with approval for the plan in terms of value reaching 91 percent of the non-banking creditors.

An announcement from the developer stated that the firm was pleased to have 91 percent of the accounts payable amounts by value finalized with signed restructured agreements. The firm noted they were still working hard to reach the 95 percent threshold.

Lootah noted that no legislative issues are facing the firm. There have been no questions from the developers to Nakheel. He also noted that not one developer has complained about the islands.

Lootah reported that the cost to build on the island in question was not the responsibility of Nakheel.

The chairman stated that a sukuk valued at $1.63 billion is expected to be issued in Q1. He noted that the firm is pushing hard and is nearly there with only a few bureaucratic hoops to jump through.

Lootah stated there are no plans currently to sell public shares.

The firm successfully repaid a sukuk worth $750 million that matured at January 16 using funds acquired back in December from the Dubai Financial Support Fund. Lootah confirmed that the sukuk had been paid and added that Nakheel did not require an additional Dubai government commitment.

Besides the amounts already committed by the Dubai government, Lootah stated that Nakheel will not require any further commitment from government sources.

Lootah put the payment to trade creditor figure for Nakheel at Dh 4 billion by the close of 2010. He stated that monies are released to Nakheel from the government as needed. Though the firm has money banked, they have not begun to use it.

Paul Holdsworth, Staff Writer, Gulf Jobs Market News
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