Nakheel to repay entire Dhs7.9 billion bank debt four years ahead of time
Dubai developer Nakheel will repay all Dhs7.9 billion owed to bank lenders with an early repayment in August 2014, nearly four years before the final loan instalment due in March 2018, the company reported today.
Nakheel’s scheduled prepayment of Dhs5.54 billion in August will come just six months after its previous early repayment in February this year, when the company paid off Dhs2.35 billion of its bank loan.
Ali Rashid Lootah, Chairman of Nakheel, said: “This is perhaps the most significant milestone in the history of Nakheel, and is a true testament to the support and guidance of His Highness Sheikh Mohammed Bin Rashed Al Maktoum and the trust and faith that he and the Government of Dubai haveplaced in our company. Without it, we would simply not be in the position we are in today.
“Nakheel is also ever thankful and grateful to the lenders, investors, business partners and regulatory authorities whoplaced their trust and confidence in our company, supporting us throughout this challenging time. They have played a key role in our success since the implementation of our post-restructuring business plan beganin August 2011.
“It is now four years since the new Board of Nakheel was appointed. During this time, Nakheel has achieved what some considered impossible: completion of one of the largest, most complexfinancial restructuring exercises followed by the successful execution of a new business plan that has placed us on a path to new growth.”
Nakheel is able to prepay all of its bank debt ahead of schedule due to savings of around Dhs23 billion on its business plan, achieved through vastly improved cash flows generated from property handovers, sales of new projects, leasing, retail, value engineering of ongoing projects and amicable settlements with the majority of trade creditors.
The early loan repayment follows a string of other achievements and milestones post-restructuring, including:
• meeting the targets set out in the business plan within three years – ahead of the scheduled five year implementation programme
• year-on-year profit growth (2010: Dhs963 million; 2011: Dhs1.3 billion; 2012: Dhs2.02 billion; 2013: 2.57 billion)
• the handover of 7,500 units to customers
• launching more than 20 new projects, ranging from neighbourhood retail centres to entire new communities
• diversifying Nakheel’s business to increase cash-generating assets
Nakheel Chairman Ali Rashid Lootah said: “We are delivering on – and in some cases out-performing– the targets set out in our business plan. Our achievements of year-on-year profit growth, contractor and customer settlements and a number of successful new project launches are concrete evidence of investor trust in Nakheel.
“The last four years have been an amazing journey, and Nakheel is now firmly re-established as a world-leading developer playing a key role in Dubai’s real estate sectors. Once again, thanks to the Government of Dubai and all of our stakeholders for their support. I look forward to continued success and delivery in the years ahead.”