Nakheel properties is planning to issue Dh4.8 billion sukuk (Islamic bonds) at the end of June to pay nearly 60 per cent of its debt as part of overall restructuring involving its separation from the state-owned conglomerate Dubai World (DW), its chairman has said.
Ali Rashid Lootah said the sukuk would be issued on time and there would be no delay as the company had taken measures to remove all obstacles for the settlement process.
Quoted by the semi-official Arabic language daily 'Alittihad', Lootah said the sukuk would be issued against guarantees from land owned by Nakheel, the property arm of DW.
“We intend to issue Dh4.8bn sukuk to pay back around 60 per cent of the company’s debt at the end of June,” he said.
“Nakheel is pressing ahead with all procedures to issue the sukuk and separate from DW…the debt settlement is a key part of the restructuring of all debt owed by Nakheel.”
Lootah said more than 90 per cent of the creditors, mostly contractors, had agreed on Nakheel’s debt restructuring plan, adding that approval by the remaining lenders is now “a matter of time.”
'Alittihad' quoted him as saying Nakheel, one of the largest property developers in the region, had succeeded in lowering claims by the contractors from around Dh10bn to Dh8bn.
“This was done after the company revised nearly 4.000 contracts with the creditors, including contractors, suppliers and commercial advertisement agencies,” he said.
The paper noted that Nakheel began paying around Dh4bn in debt to nearly 1,000 lenders, adding that the rest would be paid in June when the company issues sukuk.
“There will be no delay in issuing sukuk…all measures are progressing without any obstacle and we expect the sukuk to be issued on time,” Lootah said.
In press comments last week, Lootah said claims made by the contractors were highly exaggerated, adding that some of them had agreed to renegotiate claims and payment. "Autonomous financial advisers appointed by Nakheel to study those claims found that they are highly exaggerated," he said.
"Many contractors have shown high flexibility in correcting their claims and bringing them down to reasonable levels...we expect to announce a deal to settle these claims this month."