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Dubai's Nakheel declares itself debt-free

Dubai - Property developer repays Dh4.4 billion of trade creditor sukuk to complete restructuring

Marking a new milestone, leading developer Nakheel on Monday declared itself totally debt-free following full payment of a Dh4.4 billion Islamic bond to close the curtain on a five-year $16 billion restructuring saga.

Nakheel, developer of a string of iconic mega projects, including Dubai’s palm-shaped islands, said its debt-free status is a true testament to the vision of His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.

With all creditor obligations now fulfilled, the company said it is beginning a new chapter in its journey of growth, crises and rebound. The Dubai government-owned company said it had already transferred funds to agent Deutsche Bank AG to cover the Dh4.4 billion sukuk maturing on August 25.

Chairman Ali Rashid Lootah told media that Nakheel could achieve its restructuring plan two years ahead of schedule and would be debt-free on August 25. Two years ago, on August 21, 2014, the developer had prepaid all Dh7.9 billion of its bank debt — four years before the scheduled repayment date.

“Today is undoubtedly one of the biggest milestones in our history. Our debt-free status is a true testament to the vision of His Highness Shaikh Mohammed bin Rashid Al Maktoum and the trust that he and the Government of Dubai placed in our company. Without it, we would simply not be in the position we are in today,” said Lootah.

“We are also ever thankful to the trade creditors, lenders, investors, business partners and regulatory authorities who trusted and supported us throughout, and played a significant role in the successful implementation of the business plan adopted in August 2011,” he said.

Achieving the impossible
Lootah said over the six years since March 2010, Nakheel has achieved what some considered impossible: completion — ahead of time — of one of the largest, most complex financial restructuring exercises, followed by the successful execution of a new business plan that placed us on a new path to growth.

“As we close the curtain on our restructuring programme, we look forward to starting a fresh chapter in which we are stronger and more resilient than ever,” he said.

Lootah said the debt repayment is concrete evidence of stakeholder trust in Nakheel. “The last six years have been an amazing journey during which we dramatically outperformed the restructuring plan despite having to work to strict financial discipline under its terms. We will continue to build on that success by further strengthening our business and delivering our diverse range of pipeline projects, including our growing portfolio of retail and hospitality assets that will play a key role in Dubai’s tourism vision,” he said.

By meeting the restructuring plan targets ahead of the scheduled five-year implementation programme, the developer generated savings of Dh25 billion. Other achievements and milestones over the last six years include consistent year-on-year profit growth as the company boosted the local economy by making payments of Dh38 billion to various creditors and contractors.

During this period, it awarded contracts worth Dh22 billion for project construction and operational matters while launching more than 70 new projects — ranging from neighbourhood retail centres to new communities — some of which are completed and operational while others are in various stages of development.

Handovers
Over these years, Nakheel had handed over 9,132 villas and apartments, and a further 1,923 land units to customers as it continued to diversify   business to increase cash-generating assets.

Nakheel’s portfolio of landmark projects in Dubai across the residential, retail, hospitality and leisure sectors include Palm Jumeirah, The World, Deira Islands, Jumeirah Islands, Jumeirah Village, Jumeirah Park, Jumeirah Heights, The Gardens, Discovery Gardens, Al Furjan, Warsan Village, Dragon City, International City, Jebel Ali Gardens and Nad Al Sheba.  Together, these span more than 15,000 hectares and currently provide homes for over 270,000 people. Nakheel has more than 21,000 residential units under construction or in the pipeline.

Current and future retail project portfolio of the developer covers more than 16 million square feet of leasable space. Developments include Ibn Battuta Mall, Dragon Mart 1 and 2, Nakheel Mall, The Pointe, The Golden Mile, Deira Mall, Deira Islands Night Souk, Warsan Souk, Al Khail Avenue, The Circle Mall, major extensions to Dragon Mart (renamed Dragon City) and Ibn Battuta Mall, and several neighbourhood community centres. Its hospitality project portfolio comprises 14 hotels/serviced apartments at various locations in Dubai, including Palm Jumeirah, Deira Islands, Ibn Battuta Mall and Dragon City.

— issacjohn@khaleejtimes.com