DUBAI, (Reuters) – Nakheel aims to pay about $8.2 billion to its creditors in June, but the Dubai developer needs approval for its March debt proposal before making the payment, a source familiar with the matter said.
The source also said Nakheel’s creditors did not unanimously approve a restructuring plan at a meeting held earlier this week.
Earlier on Thursday, Arabic daily al-Ittihad reported that Nakheel would repay creditors $8.2 billion in June, citing a source attending the creditors meeting.
On March 25, Dubai World unveiled a long-anticipated restructuring proposal, mainly linked to its property units, including Nakheel, to pay the roughly $26 billion it owed to creditors.
Under the proposed plan, Nakheel would meet its 2010 and 2011 obligations to its Islamic bondholders and would repay its creditors 100 percent of its debt through a mix of 40 percent cash and 60 percent tradable security.
The source said the $8.2 billion would represent the first payment to creditors, who are owed about $23 billion. But the timing of repayment is still unknown because under the terms of the proposal, all creditors would have to back the plan in order for the payments to go through.
On Wednesday, construction firm Arabtec and Aabar Investments called off their agreement for Aabar to acquire 70 percent of Arabtec as analysts said that Arabtec no longer needed the deal following Dubai World’s repayment proposal.
Dubai will spend up to $9.5 billion restructuring its debt-laden Dubai World conglomerate in a plan to give back lenders their money in five to eight years and to repay two key bonds.
It said it will pour in $8 billion into Nakheel, with a $1.2 billion debt-for-equity swap.