Dubai: Developer Nakheel confirmed Thursday it has paid out Dh3.4 billion in cash to its creditors to date and announced the appointment of a consultant to assess claims.
It also said it has resumed work on a third project — the Emirates cluster in International City — after Al Furjan and The Gardens View Villas.
Nakheel started paying trade creditors to whom it owed Dh500,000 or less in March and confirmed it initiated payments of Dh4 billion to its other creditors on June 30. This leaves Dh600 million outstanding.
"I assume the outstanding is connected to trade creditors, the other 15 per cent" who have still to accept Nakheel's restructuring terms, Chet Riley, analyst at Nomura International, told Gulf News.
The developer to date has about 85 per cent (by value) of acceptance from its trade creditors.
"Nakheel is working closely with the rest of our trade creditors to achieve its 95 per cent acceptance of all payables and claims by the end of the year," a Nakheel spokesperson said.
The developer needs this approval percentage to issue the sukuk to pay creditors the remaining 60 per cent of outstanding it hasn't paid in cash.
Sticking point
The issuance of the sukuk, part of Nakheel's restructuring plan, is widely believed to happen before year-end.
A comment made last week by Nakheel CEO Chris O'Donnell suggests as much. "We've had good discussions with the banks and consolidation and restructuring should be pretty much completed by end-year," he said.
Riley said there could be a potential sticking point.
"As far as I understand, some of the creditors agreed to a discount before the deal was offered but still weren't paid. It is now unclear whether Nakheel agreed to the 40 per cent cash repayment relates to pre-agreed discounted levels or the full 100 per cent outstanding," he said.
The developer confirmed the appointment of an independent claims consultant to commence the assessment and evaluation of the estimated claims submitted by the various trade creditors.
"This is another important milestone in the finalisation of the restructuring process," the spokesperson said.
Completing short-term projects is the other mission related to the restructuring plan. Last week, the developer restarted construction on Al Furjan villas and apartments and The Gardens View Villas.
