Arabtec receives payment from Nakheel

The UAE's biggest contractor is one of many who have suffered due to late payments.

RELATED ARTICLES: Halcrow to agree Nakheel repayment terms in weeks | Half of Nakheel's creditors yet to agree terms | Late payments threaten contractors' GCC expansion

The UAE’s biggest construction contractor Arabtec has received payment from cash-strapped developer Nakheel.

Construction Week also understands that some more of Nakheel’s trade creditors, namely KEO International and Van Oord, were also among those to receive funds.

The revelations come after months of speculation as to how the developer of the Palm Jumeirah would pay off its AED91 billion-worth of debt.

Story continues below

Advertisement

FEATURED COMMENT Please click here to comment on this article

Arabtec's CEO Tom Barry told Emirates Business: "We have been given the first token payment of Dh500,000 as promised to the trade creditors. They have honoured that promise. I am also aware that certain consultants and designers have also got the payments in the market.”

In an exclusive interview with Construction Week last month, the company’s Chief Financial Officer Ziad Makhzoumi said Nakheel had signed an agreement to make a payment in June, and that there was no bad feeling between the two parties.

Currently, the developer is still trying to convince another 15% of its trade creditors to agree to its proposed payment terms, in which Nakheel would pay 60% of its debt back in Sukuk and just 40% in cash.

A spokesperson from Nakheel said confirmed to reporters at Zawya that all of its trade creditors "have been or are in the process of being paid AED 500,000, which means that those owed AED 500,000 or less are being paid in full."

The spokesperson added: "our talks with our partners are progressing and we are confident that an agreement will be reached shortly."