Trade creditors to Nakheel will start receiving cash payments totalling AED4bn ($1.09bn) in early July now that 75 per cent of the firms owed money have agreed to the restructuring terms.
A spokeswoman for Nakheel said that 75 per cent of the property developers’ trade creditors had agreed “in principle” to the deal. This means that they will receive 40 per cent of their outstanding bills in a cash settlement.
The remaining 60 per cent will be repaid in the form of a sukuk, which will only be issued once the approval rate for the plan has risen above 95 per cent.
Nakheel is restructuring $10.5bn of liabilities after the bursting of Dubai’s property bubble left it struggling to repaid its debts and forced the company to put many of its flagship projects on hold.
Nakheel began making cash payments to trade creditors owed AED500,000 or less in March. The company said it expected to issue the sukuk to trade creditors “in the coming months”.
The company is also in the process of restructuring its outstanding liabilities to financial creditors. The spokeswoman for the company said that more details on the progress of the restructuring of the financial debt should be provided in mid-July.