Dubai's Nakheel gets more trade creditor support

Indebted developer Nakheel, builder of man-made islands off the coast of Dubai, said on Wednesday that 91 per cent of its trade creditors have agreed to its $10.9 billion restructuring proposal.

Nakheel, whose debt troubles forced its parent company Dubai World to announce a shock debt delay last year, is struggling to negotiate terms with contractors who hold the keys to its many delayed projects.

Dubai World secured unanimous support from lenders in October for its $25bn restructuring plan but Nakheel's has been more complicated and it is still shy of the 95 per cent needed to finalize the restructuring.

In an emailed statement, a Nakheel spokesman said the developer was pressing ahead to attain the "restructuring threshold" needed. It gave no further details.

Nakheel has previously said 85 per cent of its trade creditors agreed to the debt deal, which offers repayment of 40 per cent in cash and 60 per cent through an Islamic bond with a 10 per cent return.

Nakheel, which began making cash payments in June, had predicted an overall agreement within weeks. But the ongoing battle with trade creditors over claims has delayed the sukuk's issuance. It is now slated for the first quarter next year.

The developer's plan is being complicated by new claims from trade creditors that could lead to more legal headaches, two sources familiar with the matter said.

The emirate's property sector was hardest hit by the economic recession, with billions of dollars worth of projects put on hold or cancelled while financing for real estate projects all but dried up.