Nakheel PJSC’s plan to offer Islamic bonds to creditors may revive sukuk trading in the Persian Gulf after new sales fell to a five-year low, according to Moody’s Investors Service and Mashreq Capital DIFC Ltd.
Nakheel, controlled by state-owned Dubai World, may issue as much as $3.2 billion of five-year sukuk to pay contractors as part of its debt restructuring plan, JPMorgan Chase & Co. said in a report Aug. 26. Islamic debt issues from the Gulf have slumped 24 percent to $2.5 billion this year, according to data compiled by Bloomberg.
Contractors are likely to sell Nakheel’s sukuk to pay bills, Thomas Barry, chief executive officer of Arabtec Construction LLC, a unit of Arabtec Holding Co., the United Arab Emirates’ biggest construction company, said in an interview Sept. 2. “All contractors are in very bad situation with regard to cash flow because of nonpayment from many entities.”
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