Dubai’s troubled real estate giant Nakheel said on Thursday it was “very close” to a deal with its trade creditors to pay 40 percent of their claims and the balance in securities.
“Nakheel has secured agreement on over 50 percent of total agreed claims by its trade creditors” amounting to around 6 billion dirhams (US$1.63 billion), the company was quoted as saying by the official WAM news agency
The trade creditors, or contractors, will receive the 40 percent cash payment once agreement is reached on 65 percent of the total agreed claims, it added.
“We are delighted with the response from our partners. We are very close to reaching the needed agreement for a 40 percent cash payment to our trade creditors,” a company spokesperson said.
The trade creditors would receive the other 60 percent of their claims, “in the form of a publicly traded security with a 10 percent per annum return.”
On Wednesday a spokeswoman said the company would repay in full Islamic bonds that matured on Thursday, which local papers have said are worth US$980.1 million. The WAM report made no reference to that. The payment is part of a restructuring plan announced by Dubai in March to inject US$9.5 billion into Nakheel’s former parent conglomerate, Dubai World, as part of a proposal to restructure some US$23.5 billion of debt.
At the time, Dubai also announced that Nakheel would cease to be a subsidiary of Dubai World and would be held directly by the government.
Nakheel had borrowed heavily to finance its massive construction projects during the city’s property boom.
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