Nakheel back in the game

Nakheel back in the game

The Dubai-based developer has confirmed that it will be using some of the funds given by the government to repay its debtors.

May 28, 2009 12:07 by Aarti Nagraj

Dubai-based developer Nakheel has said that it has received money from the government, and will be making use of the funds to pay back its debts, reports Reuters. “Following reports in the media … Nakheel PJSC confirms that it has received funds from the government of Dubai,” the company said in a statement on the Nasdaq Dubai website on Wednesday.

“The amount, terms and use of all the funds remain under discussion but some of the funds will be used for payments to contractors,” it said.

As with other developers in Dubai, Nakheel has been severely hit by global crisis, and according to media reports, has incurred debts.

Last week, The Sydney Morning Herald claimed that the developer was one of the main reasons for the shutdown of a 10-year-old advertising agency called The One Centre. Nakheel apparently owes the agency $1.5 million in fees; “The administrators’ lawyers are looking at what, if any, action can be taken against Nakheel,” reported the daily.

While Nakheel has been unable to give a statement about the same, they told Kipp last month that the company “doesn’t disclose confidential information about supplier contracts.”

That came in response to a report in the UK-based magazine New Civil Engineer, which quoted analysts as saying that Nakheel has not paid debts amounting to more than $290 million. The money is reportedly owed to engineering companies in the UK such as Atkins, Mouchel, Scott Wilson and WSP.

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Tags: bonds, debts, developer, Dubai, Financial Crisis, funds, government, nakheel, Real estate, UAE Central Bank