Wednesday, 26 January 2011 at 13:40, Reuters, Dubai
Legal claims against Dubai World property unit Nakheel are not delaying the developer's proposed restructuring plan, its chairman said on Wednesday.
Sources familiar with the matter said last month that the company's restructuring was being complicated by new claims from trade creditors that could lead to more legal headaches down the road.
Nakheel will also not need additional financing from the Dubai government, Chairman Ali Rashid Lootah told reporters on Wednesday.
The developer said last month that it would repay a $750 million Islamic bond that matures next month, after funds were made available by the Dubai Financial Support Fund.
"We will not need any more additional commitment from the Dubai government more than what they already have committed" Lootah said. "We have money in the bank. We have not started using it yet."
Lootah said the government released funds to Nakheel as required.
He added the developer, famous for man-made islands shaped like palms, was on track to issue a $1.63 billion Islamic bond, or sukuk, in the first quarter.
The company has previously said it plans to issue the sukuk by the end of January.
Under Nakheel's $10.9bn restructuring plan, trade creditors have been offered 40 per cent of what they are owed in cash and the rest through an Islamic bond.
Nakheel, whose debt troubles forced its parent company Dubai World to announce a shock debt delay in 2009, is struggling to negotiate terms with contractors who hold the keys to its many delayed projects.
The indebted developer has said that 91 per cent of its trade creditors have agreed to its restructuring proposal.
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.
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