Dubai property developer Nakheel, one of the companies at the heart of Dubai’s debt crisis, is planning to start approaching banks to raise fresh financing for the first time since early 2009.

According to the firm’s chairman Ali Rashid Lootah, Nakheel is already having discussions with banks about raising financing for new projects in Dubai. The first of which could involve the company raising around $200m for the expansion of the Dragon Mart mall.

Nakheel assets
  $ bn
2008 42.3
2009 21.8
 July 2010* 21.1
*latest figures available. Soure: Nakheel

“We have already approached a couple of banks about this,” says Lootah. “We plan to tender the projects in mid-October and hopefully award them in January, so we have around three months to negotiate the bank financing.”

He adds that the developer could also try and raise bank finance for the development of 104 new villas on the Palm Jumeirah, but that it was still not clear how much would need to be raised for this project.

“Banks are looking for investments. They have a lot of money they don’t know what to do with,” Lootah added when asked what he thought the response from banks would be.

Nakheel, along with its Dubai-government owned parent company Dubai World, was forced into a painful debt restructuring in 2009 of around $25bn. As a result of the restructuring, Nakheel became directly owned by the government, which also promised to inject $7.3bn into Nakheel to help it met its commitments and keep operating. Lootah says he expects to not need the full amount. “We will have a requirement for much less than the full $7.3bn,” he says.

The firm issued AED3.8bn in Islamic bonds (sukuk) that mature in five years to its contractors and trade creditors in September, as part of the restructuring deal. A sukuk programme of AED8.5bn was originally established, but Lootah says he expects only another AED1bn to be issued by the end of the year.