Nakheel transfers funds for $1.2bn sukuk payment

22 August 2016

The payment on sukuk’s maturity will make Nakheel a “debt-free’’ entity on 25 August

Nakheel, Dubai government-controlled developer of manmade islands off the coast of Dubai, has said it will make the full payment of its AED4.4bn ($1.2bn) trade creditor sukuk upon its maturity, which will make a debt-free entity.

The scheduled payment on 25 August, will formally end Nakheel’s financial restructuring, which began in August 2011.

“Yesterday we transferred the money to the agent, Deutsche Bank, and they will start releasing the payment to all the sukuk holders,’’ Nakheel chairman Ali Rashid Lootah told a press conference in Dubai on 22 August.

The company, in August 2014, prepaid all AED7.9bn of its bank debt – four years ahead of the scheduled repayment date.

Nakheel has completed the financial restructuring plan targets two years ahead of the scheduled five-year implementation programme, with savings of AED25bn, the company said without giving details, in a statement following the press conference. Over the past six years, the developer has made payments of AED38bn to various creditors and contractors, and awarded contracts worth AED22bn for construction projects and operational matters.

It has launched more than 70 new projects, ranging from neighbourhood retail centres to entire new communities. Some of those projects have already been completed, including handing over 9,132 villas and apartments, and a further 1,923 land units to customers, while others are in various stages of development, according to the statement.

Nakheel has made a net profit of AED2.95bn during the first half of 2016, which was a 4 per cent increase on the net income recorded for the corresponding period of the last year. The company has reported year-on-year growth in profitability since 2010.

“As we close the curtain on our restructuring programme, we look forward to starting a fresh chapter in which we are stronger and more resilient than ever,” Lootah was quoted as saying in the statement.


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