Property in Dubai
Nakheel announces second phase of debt payments to creditors
Nakheel, the real estate giant in Dubai, has begun paying out the second phase of cash and securities deal.
The Nakheel Chairman, Ali Lootah, in his statement, mentioned that the company is making 40 percent cash payments to trade creditors.
Nakheel had already begun initial payment of Dh.500,000 to trade creditors in March. The trade creditors will receive the rest of 60 percent in the form of publicly tradeable security, with 10percent annual return during the coming months, Lootah said. The payment forms a part of restructuring strategy by Dubai announced during the month of March, so as to inject 9.5 billion dollars into Dubai World, Nakheel’s former parent group, as a part of restructuring few 23.5bn dollars of debt.
Dubai had also made an announcement that Nakheel will cease to be a subsidiary of Dubai World and will directly be held by the government, which was also part of restructuring plan.
Nakheel had borrowed heavily to finance its major construction projects during the property boom in the city, which came to a halt when the emirate was badly hit by the global financial meltdown.
Posted on 2/7/2010