By Manoj Nair, Associate Editor
Having cleared all of its historical debts, Nakheel confirmed talks are on with banks to tap “cheap” funds for its ongoing and future projects. But there is no intention to seek such funds through another sukuk or via a share offer.
As of today, Nakheel is completely off debts on its books, having paid off Dh4.4 billion to trade creditors via a sukuk. It had in 2014 paid off Dh7.9 billion to its banking lenders, four years before they were due.
“Bank finance is much cheaper to tap than a sukuk … as for an IPO, we need a much stronger portfolio to capitalise on it,” said Ali Rashid Lootah, Chairman. “We are in serious discussions with different lenders. We can show them a strong performance through the years and a balance-sheet that is very resilient.”
Lootah said he is hopeful of netting a new funding agreement before the year end, but did not reveal the size of the final figure that will be raised. The funds can come in quite handy with Nakheel’s existing roster of projects, which includes Deira Islands, for which some of its many elements are still being finalised. This includes a mega-mall, with an estimated development cost of Dh4 billion plus.
“All of our projects are viable; they make commercial sense and on many of these, the pre-leasing activity has been quite strong. This is why banks are very much interested to come in and finance our projects. As such, I find that this is the cheapest way to borrow.”