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

Nakheel plans to raise new debt for the first time since the financial crisis after repaying a Dh4.4 billion Islamic bond.

The developer behind Dubai’s palm-shaped islands said the final trade creditor sukuk payment this week marked the end of the company’s financial restructuring that began in August 2011.

“Officially as of today we have no debt,” Ali Rashid Lootah, chairman of Nakheel, told reporters in Dubai.

Nakheel had to be bailed out by the government after amassing billions of dollars in debt during a property boom that turned to bust in late 2008. The developer was at the heart of the ensuing 2009 Dubai World debt crisis which rocked global financial markets.

Aidan Birkett, the British financier who led the Dubai World restructuring recognised that Nakheel was key to the overall success of the plan.

“If you fix Nakheel, you fix the real estate sector and you go a long way to fixing the Dubai economy,” he told The National in March 2010.

Nakheel said it had met its restructuring targets two years ahead of the scheduled five-year implementation programme.

The repayment of the sukuk is a significant milestone for the developer and paves the way for it to raise fresh borrowings to fund its vast construction programme.

“We will go to the market and see who can give us the best rate,” said Mr Lootah.

Nakheel has about 21,000 homes either under construction or planned while its retail project portfolio covers more than 16 million square feet. It also has 14 hotel and serviced apartment projects around the city.

scronin@thenational.ae

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