Nakheel properties intends to issue the much-delayed Dh4.8 billion sukuk (Islamic bonds) to creditors this week as part of a five-year restructuring plan to be launched on Wednesday, its chairman said in remarks published on Tuesday.
Ali Rashid Lootah said the company would launch the $13-billion (Dh48billion) restructuring programme after succeeding in securing approval by all creditors.
“Nakheel will launch the restructuring plan tomorrow (Wednesday)…it will then issue Dh4.8 billion sukuk within one or two days after the start of that plan,” Lootah told the Sharjah-based Arabic language daily 'Al Khaleej'.
He said the sukuk would be issued for “qualified” commercial lenders who have signed agreement with the company, adding that the Dubai Land and Property Department had just completed the evaluation of all land owned by Nakheel.
Lootah said the sukuk would be issued in one batch but noted that the distribution of the bonds could take two to three months.
“The German Deutsche Bank will manage the issue….the sukuk will not be listed in the beginning because Nakheel is keen to provide creditors with all options so they can fully utilise them whether through selling the sukuk or mortgaging them in exchange for credit facilities….listing will be set later,” he said.
In earlier comments, Lootah said Nakheel does not object to plans by any bank to buy debt by its creditors following reports that a Hong Kong-based distressed debt firm, founded by ex-Deutsche Bank veterans, has approached trade creditors of Nakheel with an aim to taking the claims off their hands.
“Trade and financial creditors of Nakheel are free to deal with their dues the way they want whether by transferring or selling them to others…Nakheel does not interfere in such negotiations because it is a matter between the creditors and investment banks which seek to buy debt,” Lootah said.
The developer, which ran a parallel restructuring process to parent firm Dubai World , has offered trade creditors repayment of 40 per cent cash and the remaining 60 percent in the form of an Islamic bond, or sukuk.
Once its restructuring is complete, Nakheel will be owned by the Dubai government.
Lootah said last month he expected the sukuk to be issued at the end of July or early August at a profit rate of 10 per cent.