Dubai-based master developer Nakheel will be completely debt-free following full payment of its Dh4.4 billion trade creditor sukuk when it matures on Thursday (August 25, 2016), the firm said in a statement today.
The developer of the world’s largest manmade islands, the Palm islands in Dubai, was in the midst of an elaborate debt restructuring exercise that began in August 2011. The developer has now said that all creditor obligations have been fulfilled, with this scheduled payment marking the end of the company’s financial restructuring.
“In six years since, since March 2010, Nakheel has achieved what some considered impossible: completion – ahead of time – of one of the largest, most complex financial restructuring exercises, followed by the successful execution of a new business plan that placed us on a new path to growth,” said Ali Rashid Lootah, Chairman of Nakheel.
“As we close the curtain on our restructuring programme, we look forward to starting a fresh chapter in which we are stronger and more resilient than ever,” he said.
Nakheel was among the Dubai developers that were impacted due to a global credit crunch in 2008/09, and the subsequent decline in the emirate’s property prices.
However, with Dubai and the UAE’s property sector rebounding handsomely from those lows in the last six years, Nakheel has achieved its restructuring goals ahead of time
Two years ago, on August 21, 2014, Nakheel had prepaid all Dh7.9bn of its bank debt – four years before the scheduled repayment date.
“Today is undoubtedly one of the biggest milestones in our history,” Lootah said, adding that the firm was thankful to its trade creditors, lenders, investors, business partners and regulatory authorities who trusted and supported it throughout, and played a significant role in the successful implementation of the business plan adopted in August 2011.
Nakheel’s debt-restructuring milestones:
• Meeting the restructuring plan targets two years ahead of the scheduled five year implementation programme, with savings of Dh25 billion;
• Repaying all Dh7.9 billion of its bank debt four years ahead of the scheduled repayment date (final payment made on 21 August 2014);
• Year-on-year profit growth (2010: Dh0.96 billion; 2011: Dh1.28 billion; 2012: Dh2.02 billion; 2013: Dh2.57 billion; 2014: Dh3.68 billion; 2015: Dh4.38 billion);
• Boosting the local economy by making payments of Dh38 billion to various creditors and contractors, and awarding contracts worth Dh22 billion for project construction and operational matters
• Launching more than 70 new projects – ranging from neighbourhood retail centres to entire new communities – some of which are completed and operational while others are in various stages of development
• Handing over 9,132 villas and apartments, and a further 1,923 land units to customers; and
• Diversifying Nakheel’s business to increase cash-generating assets.
Source:: Emirates 247
Life comes a full circle for Nakheel; Declares itself debt-free
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