Dubai's Nakheel Starts Payment to Creditors in $10.5 Billion Restructuring - Bloomberg

Nakheel PJSC started cash payments to trade creditors as the Dubai World-owned property company seeks to restructure $10.5 billion of liabilities after real- estate prices slumped in the emirate.

Nakheel started making “40 percent cash payment to our trade creditors,” according to a company statement today. “The announcement marks significant progress in our recapitalization plan following on from the initial payments to trade creditors of 500,000 dirhams or less which commenced in March.”

Nakheel, the builder of palm-shaped islands off Dubai’s coast, said in March that trade creditors would be offered 100 percent recovery of their claims -- 40 percent through a cash payment and 60 percent through a publicly tradable Islamic bond, paying 10 percent return annually. The Dubai government in March pledged to pump $8 billion into Nakheel, and will take over its ownership from Dubai World after the restructuring is complete.