Dubai: Developer Nakheel is not in arrears to Arabtec as much as some analysts fear, said Ziad Makhzoumi, chief financial officer of the largest builder in the UAE.
Arabtec, which expects to receive an overdue payment by end-June following Nakheel's debt restructuring, is well-funded after managing its cash resources carefully during the downturn, Makhzoumi said.
"It is not as big as the market expects," he said, referring to the payment but declining to say how much Arabtec would get from the developer, a unit of state-owned conglomerate Dubai World.
"We are well funded. We manage our cash aggressively ... it was never in doubt we have enough cash," he said. "We would have liked to have been in a better situation [in terms of liquidity] but the whole world is collapsing. Countries are collapsing let alone companies," he said.
Some analysts have put the figure Nakheel owes Arabtec at around Dh2 billion while UBS' Saud Masoud has estimated it to be between Dh500 million and Dh1 billion.
Dubai World and its core creditor banks have agreed on a proposal to restructure $23.5 billion (Dh86 billion) in debt. As part of the proposal, Nakheel trade creditors have been offered full repayment, with 40 per cent in cash and 60 per cent in the form of an Islamic bond, or sukuk, which has a 10 per cent annual return.
Arabtec expects the Nakheel payment by end-June, while payment in the form of bonds could take several months, its chief executive Riad Kamal said on Monday.
Kamal said Nakheel's cash would be circulated to pay Arabtec's suppliers and subcontractors in the UAE, adding the firm would not need to raise additional cash for its projects outside the UAE.
Al Jallaf resigns
Arabtec Holding, the largest construction company in the UAE, said yesterday that board member Anees Al Jallaf resigned and his resignation was accepted by its directors, according to a statement on the Dubai bourse website.
