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Nakheel confirmed that it has instructed the repayment of Dh2.35 trillion of bank debt, more than a year and a half ahead of time.
Announced in January, the early repayment, part of Dh6.8 billion due to be repaid by September 2015, reflects Nakheel's strong financial performance after its 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.
"We continue to deliver on - and in some cases out-perform - the commitments set out in our post-restructuring business plan," Nakheel Chairman Ali Rashid Lootah said. "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."
He continued: "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, the developer said it has restarted work on all ten of its near-term projects, delivered around 8,000 units to customers across various Nakheel communities, paid around Dh13 billion to contractors and suppliers, paid interest of Dh1 billion to banks and made profit payments of around Dh1 billion to sukuk holders. The company also reported savings of approximately Dh23 billion by outperforming the post-restructuring business plan. It has also launched new projects to revive the company's core business of property development.
There are more than 4,000 units in the development pipeline with an estimated current sale value of Dhl3 billion, with the first handover of completed units due this year.
Nakheel also said it has expanded its retail offering, with several new projects under construction. When completed, these projects will more than double the developer's existing net leasable area from 2.5 million sq ft to about 6 million sq ft.
The company has also diversified into the hospitality and leisure sectors, with a plan to develop nine hotels over the next three to five years. The first hotel is expected to open this year.
Nakheel's bank debt and payment dates are Dh6.8 billion by September next year, then Dh200 million by March 2016 and Dh900 million by March 2018. The trade creditor sukuk is due by August 2016.
Source: Property Weekly