Dubai's Nakheel repays $1.2b Islamic bond

Dubai: Nakheel, the developer of Dubai’s palm-shaped islands, has repaid an Islamic bond, bringing an end to a debt restructuring saga that pushed the emirate to the brink of default in 2009.
The Dubai government-owned company transferred funds to agent Deutsche Bank on Sunday to cover the Dh4.4 billion ($1.2 billion) sukuk maturing later this month, Chairman Ali Rashid Lootah told reporters in Dubai. The securities, which have a profit rate of 10 per cent, were issued to contractors and suppliers in 2011 as part of a plan to reorganise more than $16 billion of liabilities.
Dubai World, Nakheel’s former parent and one of the emirates’ three main holding companies, roiled global markets in November 2009 when it said it may halt payments on about $25 billion of debt. Dubai had to borrow $20 billion from the United Arab Emirates central bank, Abu Dhabi and two of its banks to help it pay liabilities.
Since the financial crisis and the debt restructuring, Nakheel has rebounded from losses by boosting recurring revenue from hotels and retail outlets as well as developments on the Palm Jumeirah island and other projects.
Lootah said the company achieved its business plan two years ahead of schedule and will be debt free on August 25. Nakheel will award more than Dh8 billion in construction contracts this year, he said.