Nakheel confirms on-time profit payment

Nakheel, Dubai-based developer of iconic Palm-shaped islands, on Thursday confirmed the on-time profit payment of Dh193 million to all holders of its Dh3.8 billion sukuk on the due date falling today. The developer, which has swung to profit in the first quarter this year, said it has made the necessary arrangements enabling Deutsche Bank, the registrar and paying agent for the trade creditor sukuk, to make the second profit payment of 10 per cent due on 15 June 2012. The payment “includes the profit on the original sukuk of Dh3.8 billion issued in August 2011 as well as the first tap issuance of Dh227 million in April 2012,” the developer said in a statement. The Islamic bond is part of Nakheel’s $16 billion debt restructuring deal, which repays trade creditors 40 per cent in cash and 60 per cent via the bond. Nakheel completed its financial restructuring in August 2011. On December 5, 2011. Nakheel announced a net profit of Dh526 million for the first half of the financial year ending 31 December 2011. It said revenues were Dh1.5 billion and were mainly driven by the handover of development properties in a number of Nakheel projects. This year, the developer said it made a profit of Dh362 million in the three months to March 31, compared to a loss of Dhs36 million in the year-earlier period as the developer handed over more properties and reduced costs. The developer, after restructuring its debts in 2011, had announced major expansion plans, including the launch of a new mixed-residential development on Palm Jumeirah. Nakheel’s new mixed-residential development on Palm Jumeirah includes two building projects named Palm Views comprising a total 192 studio units all priced at Dh1 million with retail space for restaurants and selected shops on the ground floor. In January, Nakheel negotiated Dh1 billion in contractor claims and said it would be delivering 7,000 units in 2012. Nakheel is also tendering new contracts in its retail segments. Nakheel, which was hit in the wake of the global financial crisis when property prices fell, wrote off $21 billion of its real estate assets. The developer completed the restructuring of a total of $16.06 billion in debt, including $8.71 billion of government debt, which is to be converted into equity.