(MENAFN- Khaleej Times) Property developer Nakheel has planned to repay Dh4 billion of bank debt ahead of schedule this year amid strong recovery in Dubai property market.
The company is repaying Dh2.35 billion debt by the end of next month and the remaining amount will be paid later in the year, according to Nakheel chairman Ali Rashid Lootah.
"The early repayment, which was due in 2015, is a major milestone in the company's history and reflects the strength of the local real estate market on significantly improved economic conditions in the UAE and the growing trust and confidence among investors in Dubai and Nakheel. The payment will come from our own resources as we have enough cash to repay debt," Lootah said at a news conference in Dubai on Saturday.
Responding to a question, he said that the company has more than Dh4 billion cash. "We have generated a lot of fresh cash by launching new projects and cutting the cost of construction," the chairman said. The company has generated about Dh22 billion more than it had expected since signing the 2011 turnaround plan, he added.
Nakheel has Dh6.8 billion of debt due in August 2015, Dh200 million in March 2016 and a further Dh900 million due in 2018, Lootah said, adding that the company is planning to repay Dh3 billion in 2015 and Dh4.5 billion in 2016.
The company will also have no problem in repaying a $1.2 billion sukuk, which the developer issued to trade creditors as part of its restructuring plan due in 2016, the chairman said.
"In 2011, Nakheel pledged to construct and deliver some 9,000 units over a five-year period across a number of projects that had been stalled during the global financial crisis. We rose to this challenge and, thanks to the support of the Government of Dubai, Nakheel customers and other stakeholders have been able to achieve this remarkable milestone," the chairman said.
Nakheel not only worked diligently to deliver its revised business plan, but also launched new development projects to revive its core business activity of property development. By the end of 2013, Nakheel had more than 3,500 units with an estimated current sale value of Dh10 billion in the development pipeline across various developments. The first handovers are due in 2014.
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