Nakheel, the struggling Dubai World-owned property developer behind the emirate's Palm islands, says it has paid Dh3.4 billion (US$926 million) to contractors and other trade partners, and appointed independent consultants to evaluate claims against it.
Nakheel is to receive $8bn in new funds under a recapitalisation plan, according to a statement from the Dubai Government in March.
The Government will convert an additional $1.2bn of its own claims on the company's assets into equity. "Today's announcement marks significant progress in our recapitalisation plan, following on from the initial payments to trade creditors of Dh500,000 or less, which commenced in March," a Nakheel representative said. Smaller trade creditors are to be paid in cash, a process Nakheel has already started with the support of the Government.
Businesses owed larger sums are to be paid 40 per cent in cash and 60 per cent in the form of an Islamic bond to be issued by the end of the year. The bond, worth an estimated Dh6bn, will pay a 10 per cent profit rate, the Shariah-compliant equivalent of interest. The developer, which fell on hard times after property prices in Dubai stagnated and financing dried up in the wake of the financial crisis, has received approval from trade creditors representing about 85 per cent of the total claims against the company.
Many of those claims represent money due to contractors for work already completed. The company needs to receive 95 per cent acceptance of the restructuring proposals before finalising the deal and issuing the Islamic bonds.
"Following the success of having approximately 85 per cent (by value) of acceptances from our trade creditors, we have appointed independent claims consultants to commence the assessment and evaluation of the estimated claims submitted by the various trade creditors," the company said. "This is another important milestone in the finalisation of the restructuring process."
Once its restructuring is complete, Nakheel is to be spun off by Dubai World, which recently secured approval from about 99 per cent of its bank creditors on its $24.9bn debt restructuring.
afitch@thenational.ae
The Little Things
Directed by: John Lee Hancock
Starring: Denzel Washington, Rami Malek, Jared Leto
Four stars
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
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Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
How it works
1) The liquid nanoclay is a mixture of water and clay that aims to convert desert land to fertile ground
2) Instead of water draining straight through the sand, it apparently helps the soil retain water
3) One application is said to last five years
4) The cost of treatment per hectare (2.4 acres) of desert varies from $7,000 to $10,000 per hectare