Nakheel close to deal with creditors

Nakheel real estate developer is close to finalising an agreement with its creditors and could begin issuing bonds for them before the end of this year, the Company’s Chairman was quoted Sunday as saying.

Ali Rashid Lootah said there was no plan to sell any company assets, adding that restructuring is progressing smoothly with the help of the Dubai government.

“Nakheel has so far succeeded in meeting 80 per cent of the demands by credits and we are now studying other demands so we can meet 90-95 per cent of their demands…these measures are subject to auditing and legal procedures,” he told the Arabic language daily Al Khaleej.

“This means that we will likely begin issuing bonds before the end of this year worth 60 per cent of the debt to our creditors with an interest rate of 10 per cent to be paid twice a year…..some creditors still need time to study our offer in order to reach a final decision.”

Lootah said the 10 per cent rate on the five-year bonds is considered high but added that it was intended to “support and help the creditors who we consider as the main partners of Nakheel.”

He said Nakheel ,the developer of the Palm and World projects in Dubai, has already repaid Dh2.5 billion of a Dh four-billion debt over the past two months.

“I should note that we have not faced any problems or challenges in the implementation of the restructuring plan thanks the unprecedented support by the government and the cooperation of all parties concerned…I don’t think the time element constitutes a real challenge in this regard…on the contrary, I can confirm that we have made big progress in a short period of time,” he said.

“Actually, the unlimited support by the government has allowed Nakheel to overcome all obstacles and challenges over the past period and largely backed our efforts to implement the restructuring plan…I would like to mention here the continuous efforts exerted by his highness Sheikh Mohammed bin Rashid al Maktoum, Vice President and Prime Minister, Ruler of Dubai…these efforts have allowed us to reach the ultimate objective of achieving the public interest and serving the interests of all commercial and financial creditors.”

Lootah said Nakheel is in the process of appointing advisers within the next two weeks to study the company’s debt and future financial commitments.

“Since the last meeting with the creditors, we have found positive responses and a general satisfaction with Nakheel’s proposals…we are now awaiting final reply as this proposal includes a lot of details which require discussion of each individual case…as for interest on rescheduled debt, it will depend on the size of the debt and the principal loan….but I would like to affirm that the proposal we have made is final and there is no intention to revise or discuss it,” he said.

Asked whether Nakheel will sell some of its assets to meet creditors’ demands, he said:”No, we have no plans to sell any property or asset for the time being.”

Lootah said the restructuring plan is progressing according to the plan, adding that it has been modified several times.

“We have completed all necessary positive amendments, which will not affect the Company’s present and future vision in terms of serving our clients and meeting our financial obligations…our new vision has helped us cut administrative spending and costs of projects…we are also focusing on accelerating project execution and upgrading implementation,” he said.

Lootah said he expected Nakheel, one of the largest property developers in the region, to resume work on six major projects in early October, adding that a 12-15 month timetable has been prepared by the Company. The projects include Jumaira Park, Jumaira Village, Jumaira Islands and Jumaira Heights, he added.

“As for long-term projects, they are still under consideration…we will move to a more efficient stage once we complete priority projects.”

Asked about restructuring of Nakheel’s “sister companies”, he said he could only comment on Limitless, which now has a new board under Nakheel supervision.

“We are in the process of studying new work plans on the local and external levels…we will also carry out a studied restructuring plan for Limitless and such a plan will take into account Limitless’s situation, which is promising.”

Follow Emirates 24|7 on Google News.