Nakheel sukuk not delayed

Report says Deutsche Bank to manage issue over a 2-3 months

Nakheel Properties is pushing ahead with plans to issue sukuk (Islamic bonds) on schedule before the end of this month and the German Deutsche Bank is expected to manage the issue, a newspaper reported on Monday.

The Dh4.8-billion sukuk are part of overall restructuring plans by the company, including separation from the government-owned Dubai World once most of its debt to contractors are other creditors are settled.

“Nakheel will not change the date set for issuing sukuk before the end of this month…there will be no postponement,” the Sharjah-based Arabic language daily Alkhaleej said, citing sources close to creditor contractors.

It said lenders had signed a final agreement with Nakheel, setting the ground for the bond issue, adding that such a process is now within days.

“Deutsche Bank will manage the sukuk issue, which will be spread over a period of two to three months,” one source said.

“The sukuk will initially not be listed at any local party to ensure creditors will benefit most from the issue whether through selling or mortgaging them in return for credit facilities…listing could be set later.”

Alkhaleej quoted Nakheel sources last week as denying reports that the company would change its 10-per cent profit rate on its sukuk.

“These news are baseless…Nakheel is committed to all its promises to settle claims by creditors through sukuk issue with a profit rate of 10 per cent over a period of five years to be paid every six months,” a source said.

“All creditors will get 100 per cent of their claims in line with the contracts signed with them….Nakheel is its doing its best to attain three goals until the end of next month - issuing Dh4.8 billion sukuk, reaching a final agreement with all lenders and completing its separation from Dubai World.”

In press comments this week, Nakheel Chairman Ali Rashid Lootah said the company would issue Dh4.8 billion sukuk at the end of June to pay nearly 60 per cent of its debt as part of overall restructuring.

He 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.

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