Nakheel plans five-year sukuk by year-end

Company expects to complete restructing before the launch

Nakheel plans to launch its five-year sukuk (Islamic bond) by year-end by when it expects to complete the debt restructuring process, a senior company executive said on Thursday.

"We expect the restructuring to be completed by year-end and the sukuk launch by then. The value, however, will be determined after the ‘overall’ settlement is achieved," Chris O'Donnell said during a site visit of Al Furjan project.

JPMorgan Chase London-based analyst Zafar Nazim, wrote in a report August 26, that Nakheel may issue as much as $3.2 billion of five-year sukuk to pay contractors as part of its debt restructuring plan. O’Donnell refused to give any figure.

Under Nakheel's debt plan, trade creditors have been offered 40 per cent of what they are owed in cash and the rest through an Islamic bond. The 60 per cent bond issue needs approval of 95 per cent of creditors.

O'Donnell said the company has already received about 85 per cent of acceptances for its debt restructuring deal and is on target to achieve the 95 per cent.

In a recent interview to Al Khaleej newspaper, Nakheel Chairman said that once the approval is reached, the company will issue five-year bonds that will pay 10 per cent interest semi-annually and will be listed on the Nadaq Dubai stock exchange.

O’Donnell reiterated that work on its six short-term projects will commence by October with the project consolidation process likely to be finalized by end of the year.

On Wednesday, Nakheel disputed the validity of a creditor claim filed against it, saying the claim will not delay its debt deal. Construction Delivery Group (CDG) filed a suit in mid-August with the special tribunal set up to handle cases related to Dubai World's debt restructuring.
 

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