Dubai’s struggling state-owned real estate developer Nakheel has announced a new board of directors, with Chairman Sultan Ahmed bin Sulayem and Chief executive Chris O’Donnell both being replaced.
Ali Rashid Ahmed Lootah has been named as the company’s new chairman. Lootah serves as vice chairman of Dubai’s Mashreq Bank, the emirate’s second-largest listed lender by market value
The new board of directors does not include Chris O’Donnell, but a Nakheel spokesperson says will retains his position as Chief executive.
Bin Sulayem will remain the chairman of Dubai World, the holding company of Nakheel.
“We welcome the new Nakheel board, which will work on the operational level, and we will give it our full support,” bin Sulayem said in a 30 March statement.
“The new board will work on strengthening Nakheel’s capabilities in line with the proposed restructuring plan that was announced,” a statement from the media office of Dubai’s ruler said. “It will start developing the major projects that will be identified based on the priorities of the company’s operations in the coming period.”
Nakheel has found itself at the centre of the financial problems that engulfed Dubai World, which is restructuring about $23.5bn of debt.
The board shuffle comes after the Dubai government announced on 25 March that it will commit $9.5bn in new funding to help Dubai World and Nakheel. Under this proposal, $8bn will be injected into Nakheel, which will be restructured separately, while Dubai World will receive $1.5bn in cash to pay for interest payments on the new debts and working capital. (MEED 25:3:10).
If approved by creditors, the plan envisions the company paying off principal on most of its debts and paying down unpaid bills to contractors and suppliers.