Dubai Real Estate Has Already Paid U.S. $ 1.061 Million To Trade Creditors

Dubai real estate company Nakheel, owned by the consortium UAE Dubai World announced today that it has paid to date to 3,900 million dinars (about 1.061 million dollars) to commercial creditors. In a statement, a spokesman for Nakheel said today's announcement marked "significant progress" in the plan to recapitalize the company after the initial payment of the debt began in March 2010.

UAE real estate said it had won approval from 91 percent of its creditors and seeking to reach 95 percent by the end of the first quarter of 2011. Last July, Nakheel officially launched a plan to restructure its debt estimated at 10,500 million dollars after the company announced the preliminary requirements on 25 March.

Nakheel at that time offered to commercial creditors (contractors and suppliers) pay one hundred% of the debt, paid 40 percent cash and 60 percent in publicly traded bonds. Financial creditors that would have secured loans, pay them Nakheel offered them one hundred percent of principal and accrued interest by an extension of maturities.

The Islamic bond holders ("sukuk") are maturing in 2010 and 2011 offered to pay one hundred percent as they were winning titles. The 30th Nakheel revealed that it had received sufficient funds from the Government of Dubai to pay an Islamic bond maturing on 16 January.

On November 25, 2009, the state-owned Dubai World consortium announced its intention to renegotiate their payment dates, which then stood at 26,000 million dollars, both the group and several of its subsidiaries including Nakheel.

Nobody knows how it has been falling so quickly, although it is clear that tens of thousands have abandoned their homes, Dubai real estate prices have crashed and as the results many of the construction projects have been postponed. But with the government eagerness to offer data, the reports are bound to grow further destroying confidence and undermining the financial system.

Instead of moving towards greater transparency, the Emirates seem to be moving in another direction. A new draft media law would be a crime to damage the reputation of the country or the economy punishable by fines of up to 1 million dirham ( 272,000 in dollars). Some say that it is already having an effect on reporting about the crisis.

Last month, local media reported through anonymous government officials in Dubai reported that they were canceling 1,500 visas daily work. This question about the number made it to Humaid Bin Dimas, a spokesman for the Dubai Department of Labor who neither confirmed nor denied this information. Some say the real figure is much higher.

As recently as November, the emirate communicated that they could not meet payments on its foreign debt of 60 billion dollars, which was feared to follow in the footsteps of Ireland and Greece. It did not collapse, but the concern that the city-state, closer to Iran of the seven Arab emirates, will go into a tailspin, has not disappeared. In any case, Dubai is still a new pearl in the world of the future.

Author Bio
James Stone is expert analyst and market researcher for Dubai Real Estate Market & UAE Property. He works for Elysian Real Estates, one of the most growing real estate firms in UAE. He advices on how to buy & sell commercial and residential property for sale Dubai