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Nakheel to Repay $4.1b Debt in 14 Days

DUBAI - Property developer Nakheel PJSC will be paying its $4.1 billion Islamic bond in the next two weeks after its parent firm, state-owned conglomerate Dubai World, was thrown a lifeline by the Abu Dhabi government.

“Nakheel confirms that it will honor all obligations related to the 2009 Nakheel Development Limited Sukuk, using funds that will be provided by the Dubai Financial Support Fund. In accordance with the terms of the Sukuk, the repayment will occur within the next 14 days,” Nakheel said in a statement posted at the Nasdaq Dubai.

In a separate statement, Dubai World said the funding from Abu Dhabi, provided the company with “a stable basis for the restructuring process.”

“Dubai World will continue to work with financial creditors to negotiate a standstill in an orderly way. As long as a standstill is successfully negotiated, Dubai World has assurances that the government of Dubai, will provide financial support to cover working capital and interest expenses to ensure the continuity of key projects.”

Meanwhile, Standard & Poor’s said the Abu Dhabi bailout is a step towards rebuilding confidence, but uncertainty remains as to the Dubai government’s general ability and willingness to provide “timely extraordinary support to its government-related entities.”

rocel@khaleejtimes.com