Nakheel sees restructuring completed by year-end

Dubai developer Nakheel expects to complete its debt restructuring by the end of 2010, its chief executive officer said on Thursday.

State-owned conglomerate Dubai World has reached near-unanimous approval for its $24.9 billion debt plan, it said in a statement this month. But Nakheel - its flagship property arm undergoing parallel negotiations - has yet to secure the backing needed for its plan.

"I expect the restructuring to be completed by the end of the year," Chris O'Donnell told reporters on Thursday.

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, or sukuk.

On Tuesday, Nakheel said it has about 85 per cent of acceptances, by value, for its debt restructuring deal and "is well on target to achieve its 95 per cent acceptance of all payables and claims within the near future".

In an earlier statement on Wednesday, Nakheel, Dubai World's property developer unit, 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.

The Dubai-based firm said it is owed Dh50 million ($13.6 million) in principal, interest and damages related to a facilities management contract for properties at the Palm Jumeirah, one of Dubai's three artificial palm-shaped islands.

In an emailed statement, Nakheel said the claim "is not a standard creditor claim, but rather a claim the whole of which is disputed, and where there is a substantial counter claim."

Legal experts have voiced concerns that claims filed in the tribunal against Dubai World or its subsidiaries could potentially cause the restructuring to come to a halt until the matter is resolved in court.

Nakheel said it has approximately 85 per cent of acceptances, by value, for its restructuring deal and is "well on target to achieve its 95 per cent acceptance of all payables and claims within the near future," according to the statement sent to Reuters late Tuesday.

Under Nakheel's restructuring plan, trade creditors have been offered 40 per cent of what they are owed in cash and the rest through an Islamic bond, or sukuk.

David P Colletti, Managing Director of CDG, declined to comment on the case or Nakheel's statement.
 

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