Dubai developer Nakheel brings an end to debt restructuring saga with Dh4.4bn payment

Nakheel, the developer of Dubai’s palm-shaped islands, has repaid an Islamic bond, bringing an end to its debt restructuring saga.

The Dubai government-owned company transferred funds to agent Deutsche Bank to cover the Dh4.4 billion sukuk maturing later this month, chairman Ali Rashid Lootah told reporters in Dubai.

The securities, which have a profit rate of 10 per cent, were issued to contractors and suppliers in 2011 as part of a plan to reorganise more than $16bn of liabilities.

Dubai World, Nakheel’s former parent and one of the emirates’ three main holding companies, roiled global markets in November 2009 when it said it may halt payments on about $25bn of debt.

Dubai borrowed $20bn from the UAE Central Bank, Abu Dhabi and two of its banks to help it pay liabilities.

Since the financial crisis and the debt restructuring, Nakheel has rebounded from losses by boosting recurring revenue from hotels and retail outlets as well as developments on the Palm Jumeirah island and other projects.

Mr Lootah said the company achieved its business plan two years ahead of schedule and will be debt free on August 25. Nakheel will award more than Dh8bn in construction contracts this year, he said.

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