Dubai property giant repays debt four years early

GMT 19:45 2014 Wednesday ,20 August

Arab Today, arab today Dubai property giant repays debt four years early

A banner of property giant Nakheel flutters
Dubai - AFP

Nakheel, the real estate giant at the heart of Dubai's financial crisis, confirmed Wednesday that it would repay all of its 7.9 billion dirhams ($2.15 billion) bank debt almost four years ahead of schedule.
The group said it had "issued instructions" for 5.54 billion dirhams to be paid to lenders on Thursday, after a previous payment of 2.35 billion dirhams was made in February.
Nakheel, which built high-profile projects including a palm-shaped island in the Gulf and a cluster of isles in the form of a world map, also said it would pay interest of 129 million dirhams owed.
It will repay 31 banks -- 10 from the UAE and 21 from overseas.
Nakheel's final instalment had been due in March 2018 but in June chairman Ali Rashid Lootah said the entire sum would be paid this summer.
He said then that the cash was being "generated from Nakheel's own income, not from the support fund of the government".
The property behemoth had piled up a large mountain of debt during five years of rapid growth in Dubai's property sector, before the global financial crisis hit the Gulf emirate in 2009.
The company was part of government-linked Dubai World group, which sent jitters in global markets when it signalled in autumn 2009 that it was facing difficulties paying off debts that totalled around $24.9 billion.
The government intervened to rescue the group, bolstered by $20 billion in aid from neighbouring Abu Dhabi.
As part of the restructuring of Nakheel, the government injected $9.5 billion that was converted into equity, separating the company from Dubai World and becoming fully owned by the government.
Nakheel is benefiting from a strong rebound in Dubai, where economic growth has been steady thanks to the trade, transport and tourism sectors after contracting 2.9 percent in 2009.
Last month, Nakheel said its profits surged 54 percent in the first half of 2014 to reach $502.7 million.
In addition to property developments, Nakheel has been involved in retail and hospitality.

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