Nakheel secures 50pc approval from creditors
Dubai, May 13, 2010
Property developer Nakheel has received 50 per cent approval from its trade creditors as part of Dubai World's $24.8 billion restructuring proposal, the company said in a statement on Thursday.
Nakheel trade creditors have been offered full repayment through a mix of 40 per cent cash and 60 per cent in a sukuk, with a 10 per cent annual return. In order to release the cash to creditors, which include contractors and suppliers, Nakheel would have to secure 65 per cent approval.
"We are very close to reaching the needed agreement for a 40 per cent cash payment to our trade creditors," Nakheel said in the statement.
Nakheel, which is a unit of state-owned conglomerate Dubai World, said it has secured agreements with claims worth about Dh6 billion ($1.63 billion).
Meanwhile, funds to repay Dubai World property unit Nakheel's $980 million Islamic bond are with the paying agent who will distribute them to sukuk holders, a Dubai government spokeswoman said.
"Money has been transferred to the sukuk holders agent who have confirmed receipt of funds. As in any bond issue, responsibility to distribute those funds lies with the agent and this is no different," said the spokeswoman, who spoke on condition of customary anonymity.
State-owned conglomerate Dubai World is in talks with creditors over restructuring $24.8 billion in debt. The Nakheel bond repayment was a key milestone and came amid debt worries at other Dubai names.
Dubai International Capital, the overseas investment arm of Dubai Holding, reiterated on Thursday it would refinance its upcoming June loan.
"We are confident of our ability to refinance the $1.25 billion loan and we continue to service our debt obligations as usual," said a spokeswoman for Dubai International Capital. – Reuters