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Nakheel plans $1.6 bln bond, part of debt plan

Key projects to start as Nakheel pbegins repayment plans

September 28, 2010 4:00 by

Property developer Nakheel plans to issue a 6 billion dirham ($1.63 billion) Islamic bond as part of its debt repayment plan as it restarts several key projects, an industry executive said on Tuesday.

Under Nakheel’s restructuring plan, trade creditors have been offered 40 percent of what they are owed in cash and the remaining 60 percent through a sukuk Islamic bond.

“We have been expecting Nakheel to issue the sukuk, which would be around 6 billion dirhams, before the end of the year,” Ahmad Saif Belhasa, chairman of the United Arab Emirates Contractors’ Association told Reuters.

Dubai contractor Arabtec’s chief financial officer Ziad Makhzoumi said Nakheel had applied for listing on Nasdaq Dubai, Arabic language daily al Ittihad reported earlier on Tuesday.

“The only place for a bond to be listed in Dubai is on Nasdaq Dubai,” Makhzoumi told Reuters.

A Nakheel spokeswoman declined to comment on the report. A Nasdaq Dubai spokesman also declined comment.

Nakheel has said it has about 85 percent of acceptances, by value, for its debt restructuring and was “well on target to achieve its 95 percent acceptance of all payables and claims within the near future”.

The company will proceed with the listing after it obtains a 95 percent agreement from creditors, Al Ittihad said on Tuesday.

Nakheel, the property arm of state-owned conglomerate Dubai World and undergoing parallel negotiations with its creditors, has yet to secure backing for its plan.

The developer expects to complete its debt restructuring by the end of the year, its chief executive said on Thursday.
Nakheel will restart construction on Garden View Villas, it said on a statement on Tuesday, as it looks to recommence work on several projects.

“The Gardens development is expected to be completed in the third quarter of 2011,” it said in the statement.

Nakheel said last week it expects to start building again on all short-term projects by the end of next month

(Reporting by Tamara Walid and Jason Benham; Editing by Amran Abocar)

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