Dubai: Nakheel has paid $681 million (Dh2.5 billion) of the $1.1 billion (Dh4 billion) it owes to trade creditors under its debt restructuring proposal, a spokesperson confirmed to Gulf News.
A report in the Al Khaleej newspaper said that about 80 per cent of Nakheel's trade creditors have agreed to new payment terms.
Nakheel said on June 30 it had begun settling bills from its biggest trade creditors, involving a payout of Dh4 billion.
The payment would help a number of contractors to move ahead with projects while suppliers and subcontractors will breath a sigh of relief.
Trickling effect
"Although this will have a trickling effect on the sub-contractors and building materials suppliers, the fact that the money is coming in the market, is a good thing and will definitely help the small suppliers and sub-contractors. Something is definitely better than nothing," a construction industry official said, requesting anonymity. Nakheel is now waiting for a final response from bank creditors on restructuring its obligations.
Nakheel said on July 14 a group of its creditors "unanimously supported" a proposal on altering the terms on $10.5 billion of loans and unpaid bills.
Agreement
The terms are supported "in principle" by the coordinating committee of its creditor banks and Nakheel expects to complete the restructuring over the "coming months," the company said.
The loans make up part of the overall liabilities that Nakheel is seeking to reorganise, which also include outstanding payments to suppliers and contractors. The offer presented to bank creditors is "final and we won't go back on it," Al Khaleej quoted Nakheel chairman Ali Lootah as saying.
Nakheel and Dubai World, one of the emirate's three main state-owned holding companies, are seeking to renegotiate terms on their debt after the world's deepest financial crisis since the 1930s roiled the emirate's real-estate market and left companies unable to raise new funding. Property prices are down more than 50 per cent in Dubai as banks cut mortgage lending.
Nakheel, which has no plans to sell assets, plans to resume work on six projects in October and is seeking to complete the projects in the next 12 to 15 months, Lootah was cited as saying.
— With inputs from agencies
