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29 March 2024

Nakheel completes restructuring

Published
By Parag Deulgaonkar

Nakheel, which officially separated from Dubai World on Tuesday, said today it has completed restructuring total debt of Dh59 billion and will commence issuing sukuk of Dh3.8 billion, the first tranche of the Dh4.8 billion sukuk programme, to trade creditors from today (Thursday).

The listing of the first trance will take place in “couple of days” on Nasdaq Dubai. Trade creditors will be offered a profit rate of 10 per cent, payable half yearly. Deutsche Bank will manage the issue.

The master developer will issue the remaining Dh1 billion sukuk tranche going forward, which will help settle contractors’ claims. However, no exact time was given for the launch of the second tranche.

Nakheel has offered trade creditors repayment of 40 percent cash and the remaining 60 percent in the form of sukuk.

Constituting the total Dh59 billion in debt was government’s assistance of Dh32 billion. Trade and bank creditors were owed Dh19 billion, and Dh8 billion, respectively. The government debt has already been equitised with the developer now becoming a wholly owned government entity. The sukuk is, however, not explicitly guaranteed by the government.

Chairman Ali Rashid Lootah said: “The sukuk is not backed by the government, but by various Nakheel assets.”

Bank creditors will be offered an interest rate of four percent over London Interbank Offered Rate (Libor) and repayment after five years.

ALootah said the company’s total liability on long term project stood at Dh10 billion but it has managed to bring it down substancially.

“We have managed to solve or accommodate investors to a value of Dh6 billion. Those who haven’t, we will pay them their principal in full after five years,” he added.
 

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