Nakheel gets government funds for January sukuk

More than 90% of creditors have agreed repayment terms.

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Nakheel has received government funds to pay a US $816.3 million sukuk that matures next month, writes Bloomberg.

The property developer - part of Dubai World, the state backed investment vehicle – is seeking to restructure around $10.5 billion with international creditors, after a sharp downturn in the emirate’s real estate market between 2009 and 2010 from falling property values and sales produced a drought in the company’s liquidity.

Now, it was revealed in an emailed statement that the government is to step in to fund the repayment of a 2.75% loan.

Yesterday the company said it had reached an agreement with 91% of its trade creditors for the loans established during Dubai’s building boom, which will be staggered over a number of years in the form of 60% sukuk and 40% cash.

Dubai World, owner of Nakheel and one of the emirate’s three main holding companies, has also spent much of 2010 restructuring its $24.9 billion debts, and in October confirmed that all creditors had agreed to the new terms and options.

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Nakheel revealed in October that it would restart the development of six projects in Dubai on a short-term basis, including Jumeirah Park, Al Furjan, Jumeirah Village, Jumeirah Islands Mansions, Jumeirah Heights Clusters and Al Badran. All projects except for Al Furjan are situated either on- or offshore close to Palm Jumeirah, its landmark housing and hotel development.