Nakheel, the property developer owned by Dubai World, swung to a first-half loss of Dh13.4 billion ($3.65bn) as revenue fell and it wrote down the value of land and property. The loss for the company, which is building palm-shaped islands off the Dubai coast, compared with a profit of Dh2.65bn in the same period a year earlier, Nakheel's financial statement for the six months through last June showed. Revenue fell 78 per cent to Dh1.97bn. A spokesman for Dubai World declined to comment.
Dubai World, owned by the Dubai Government, began talks last week with banks to restructure $26bn of debt, including repayment of $4bn due on an Islamic bond issued by Nakheel that is due next Monday. Dubai World held talks yesterday with its six main creditors, said a banker familiar with the negotiations. Nakheel has written down the value of land and certain developments under construction to their market value after property prices slumped, the company document said. Nakheel has worked to reduce capital expenditure by slowing down or scaling back some projects to beyond 2012, it said.
Nakheel had total assets of Dh147bn at the end of June compared with Dh155.5bn at the end of December of last year. It had liabilities of Dh73.3bn, including term loans of Dh16.3bn. The company has received Dh9bn in assistance from the Dubai Financial Support Fund since the onset of the global credit crisis, said Abdulrahman al Saleh, the director general of Dubai's Department of Finance, yesterday.