Nakheel has revamped its corporate governance and business practices after reporting a Dh76.6 billion (US$20.85bn) loss in 2009, according to a bond prospectus sent to investors.
While not specifically mentioning past problems, the company's filing acknowledges a wide range of issues addressed by management, offering an unusual glimpse at the inner workings of the developer behind some of Dubai's biggest projects, including Palm Jumeirah and The World.
The changes include limiting the ability of executives to make financial commitments of more than Dh10 million without the approval of the board of directors and a new public tender process for awarding construction contracts. Nakheel executives could not be reached for comment on details of the report.
A new board of directors was installed at the company in March last year. As part of the restructuring process, a review was launched of the company's "financial, reporting and decision-making controls", according to the filing.
"It's something we'll see far more around the region," said Matthew Green, the head of consultancy for the UAE office of CB Richard Ellis, the property company. "Companies need to have that accountability."
Nakheel's executive committee now meets on a weekly basis and approves expenditures ranging from Dh500,000 to Dh10m. The company has also centralised decision-making and established an independent internal audit department. Contracts awarded through the public tender process must also be approved by the executive committee or board of directors, depending on the value.
The revamped company is transitioning away from a role as an "active developer" to place more emphasis on managing its land bank and serving as master developer for larger projects, the company said in the filing.
Nakheel has halted work on land reclamation projects - the man-made islands that made Nakheel's reputation - in favour of a menu of "near-term" projects that it hopes to complete by mid-2013.
It will need Dh8.8bn to complete the projects, which include 245 apartments in the Clusters section of Jumeirah Heights and 819 villas in the Al Furjan development.
The company is also considering selling income-producing assets, including apartment buildings in International City and Discovery Gardens, "depending on market conditions".
"It is certainly going to be a crucial couple of years for them," Mr Green said. "They are shifting from a sales-based company to one that needs to develop income-related projects." Nakheel has been moving to cut its expenditures, including a 74 per cent reduction in staff, from 3,818 to 986 employees, since October, 2008, as it suspended building and marketing projects. Further staff cuts are likely as the company completes projects already under way, the filing said.
In the past, each project had its own office and dedicated management team; now those roles have centralised and consolidated, the company reported. The company is also changing its relationship with homebuyers. Historically, Nakheel was granted an exception to the law requiring developers to establish an escrow fund for payments from buyers, but now it has "agreed with the Dubai Land Department to implement escrow accounts for all its projects".
Nakheel completed a Dh60bn restructuring last month, including a formal separation from its former parent Dubai World. The prospectus was issued to the financial community to support an Islamic bond, or sukuk, the company issued to help repay contractors.
Creditors have received 40 per cent of the money owed in cash and 60 per cent in the sukuk.
Nakheel recorded a Dh58.2m profit in the first six months of last year, after reporting the Dh76.6bn loss in 2009. The losses primarily reflected the writedown on the value of the company's property as prices dropped following the global financial crisis.
kbrass@thenational.ae
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
The specs
Engine: 1.5-litre 4-cylinder petrol
Power: 154bhp
Torque: 250Nm
Transmission: 7-speed automatic with 8-speed sports option
Price: From Dh79,600
On sale: Now
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
The Africa Institute 101
Housed on the same site as the original Africa Hall, which first hosted an Arab-African Symposium in 1976, the newly renovated building will be home to a think tank and postgraduate studies hub (it will offer master’s and PhD programmes). The centre will focus on both the historical and contemporary links between Africa and the Gulf, and will serve as a meeting place for conferences, symposia, lectures, film screenings, plays, musical performances and more. In fact, today it is hosting a symposium – 5-plus-1: Rethinking Abstraction that will look at the six decades of Frank Bowling’s career, as well as those of his contemporaries that invested social, cultural and personal meaning into abstraction.
Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
Disability on screen
Empire — neuromuscular disease myasthenia gravis; bipolar disorder; post-traumatic stress disorder (PTSD)
Rosewood and Transparent — heart issues
24: Legacy — PTSD;
Superstore and NCIS: New Orleans — wheelchair-bound
Taken and This Is Us — cancer
Trial & Error — cognitive disorder prosopagnosia (facial blindness and dyslexia)
Grey’s Anatomy — prosthetic leg
Scorpion — obsessive compulsive disorder and anxiety
Switched at Birth — deafness
One Mississippi, Wentworth and Transparent — double mastectomy
Dragons — double amputee
Killing of Qassem Suleimani
The%20specs
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Washmen Profile
Date Started: May 2015
Founders: Rami Shaar and Jad Halaoui
Based: Dubai, UAE
Sector: Laundry
Employees: 170
Funding: about $8m
Funders: Addventure, B&Y Partners, Clara Ventures, Cedar Mundi Partners, Henkel Ventures
How to join and use Abu Dhabi’s public libraries
• There are six libraries in Abu Dhabi emirate run by the Department of Culture and Tourism, including one in Al Ain and Al Dhafra.
• Libraries are free to visit and visitors can consult books, use online resources and study there. Most are open from 8am to 8pm on weekdays, closed on Fridays and have variable hours on Saturdays, except for Qasr Al Watan which is open from 10am to 8pm every day.
• In order to borrow books, visitors must join the service by providing a passport photograph, Emirates ID and a refundable deposit of Dh400. Members can borrow five books for three weeks, all of which are renewable up to two times online.
• If users do not wish to pay the fee, they can still use the library’s electronic resources for free by simply registering on the website. Once registered, a username and password is provided, allowing remote access.
• For more information visit the library network's website.
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, (Leon banned).
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
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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SPECS
Engine: Two-litre four-cylinder turbo
Power: 235hp
Torque: 350Nm
Transmission: Nine-speed automatic
Price: From Dh167,500 ($45,000)
On sale: Now
