Nakheel to clear debt within 14 days

Nakheel's due debts are to be honoured.

The repayment of Nakheel’s Islamic sukuk bond is set to be completed with the next 14 days, according to a statement posted on the Nasdaq Dubai website.

In a separate statement, Nakheel said it will honour all obligations related to the 2009 Nakheel Development Limited Sukuk using funds that will be provided by the Dubai Financial Support Fund (DFSF).

Last night in a high level meeting held behind closed doors, high ranking officials from both Abu Dhabi and Dubai governments agreed that Abu Dhabi would provide US $10 billion (AED36.7 billion) to the DFSF, to allow Dubai World to repay $4.1 billion of Islamic sukuk bonds that are due today.

The deal will also see the UAE central bank injecting liquidity as needed into banks that face exposure to Dubai World.

Sheikh Ahmad Bin Saeed Al Maktoum, chairman of the Dubai Supreme Fiscal Committee, confirmed the financial agreement in a statement.

"Recently, Dubai World announced that it might not be able to commercially support its obligations,” he said.

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Since that time, the Government of Dubai has worked closely with the Abu Dhabi Government and the UAE Central Bank in addressing and assessing the impact of Dubai World on the UAE economy, banking system and investor confidence."

He added: "Specifically, the Government of Abu Dhabi has agreed to fund $10 billion to the Dubai Financial Support Fund that will be used to satisfy a series of upcoming obligations on Dubai World.

"As a first action for the new fund, the Government of Dubai has authorised $4.1 billion to be used to pay the sukuk obligations that are due today.

Dubai World, this morning, welcomed the announcement by the Government of Dubai to provide financial support to the Group, including full repayment of the Nakheel 2009 sukuk.

“This support provides funding and a stable basis for the restructuring process which continues,” it said in a statement emailed to Construction Week.

“Dubai World will continue to work with financial creditors to negotiate a standstill in an orderly way. As long as a standstill is successfully negotiated, Dubai World has assurances that the Government of Dubai, through the DFSF, will provide financial support to cover working capital and interest expenses to ensure the continuity of key projects.”

A number of advisers have been appointed to assist Dubai World with its restructuring process, including Aidan Birkett of Deloitte, who has been appointed as chief restructuring officer by the DFSF.

Rothschild and Clifford Chance continue to act as financial and legal advisers respectively to Dubai World in relation to the restructuring, while Alix Partners continues to assist in resolving certain operational issues.
 

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