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Developer delivers ahead of commitments in restructuring business plan

Nakheel reaches another milestone by paying banks Dhs2.35 billion 18 months early

: Monday, February 24 - 2014 @ 11:48

Nakheel confirmed that it has instructed the repayment of Dhs2.35 billion of bank debt – more than a year and a half ahead of time.

Announced in January this year, the early repayment – part of Dhs6.8 billion due to be repaid to banks in September 2015 – reflects the strong financial performance of the company post-restructuring, the underlying strength of the growing local real estate market, significantly improved economic conditions in the UAE and increased trust and confidence among investors in Dubai and Nakheel, the company said.

Nakheel Chairman Ali Rashid Lootah said: “We continue to deliver on – and in some cases out-perform – the commitments set out in our post-restructuring business plan. Our prepayment is a major milestone in Nakheel’s history, and further proof of our robust financial performance since we completed our restructuring in August 2011.

“The early payment has been made possible by delivering thousands of units to customers, ongoing cost savings achieved and the support of the Government of Dubai, investors and business partners, all of whom I thank again for their patience, understanding and trust and confidence in Nakheel.”

Since restructuring in 2011, Nakheel has:
• recommenced work on all 10 of its ‘near term’ projects, boosting the local real estate market and the economy by providing opportunities for local contractors to commence construction activity in Dubai;
• delivered around 8,000 units, across various Nakheel communities, to customers;
• paid around Dhs13 billion to contractors and suppliers; paid interest of AED1 billon to banks and made profit payments of around Dhs1 billion to sukuk holders;
• saved approximately AED23 billion by out-performing the post-restructuring business plan;
• launched new projects to revive the company’s core business of property development. There are currently more than 4000 units with an estimated current sale value of Dhs13 billion in the development pipeline, with the first handovers of completed units due this year;
• expanded its retail offering, with several new projects under construction which, when complete, will more than double the existing net leasable area from 2.5 million square feet to about six million square feet; and
• diversified into the hospitality and leisure sector, with a current plan to develop nine hotels over the next three to five years, with the first hotel due to open this year.

Ali Rashid Lootah said: “Nakheel is well on its way to establishing its leading position in the local and regional real estate sector. We continue to successfully deliver on our business plan and to earn trust and confidence of our investors and customers. The early payment of a significant proportion of bank debt is a key Nakheel initiative taken in proactively managing its financial affairs and in laying the foundation for a long term sustainable business. We expect to further improve the financial health of our business.

“I thank the Government of Dubai, the regulatory authorities, our customers, business partners, my fellow board members and of course our talented and experienced team of management and staff for their support and assistance, without whom it would not have been possible to achieve this historical milestone and the strong financial performance recorded to date.”

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Monday, February 24- 2014 @ 11:48 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.

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