Debt laden Dubai developer puts off repaying creditors for second time

Developer Nakheel has again delayed repaying billions of dollars to creditors after announcing last week it had still not agreed with enough of them how to repay its $10.5bn debt.

The Dubai based firm, responsible for schemes including the man-made Palms projects, said last Wednesday that it now expected its debt restructuring to be finished in the first half of 2011, rather than in the first quarter of the year as previously promised.

Nakheel is thought to owe UK consultants and engineers £250m, to companies including Halcrow, Atkins, EC Harris, Hyder, Mouchel and WSP.

In January it said that it expected the sukuk – a type of Islamic bond – would be issued to creditors in the first quarter of 2011.

At the time it said that 91% of creditors had agreed to a deal where 40% of debts would be paid in cash, and the remaining 60% in sukuks, which would pay a return of 10% annually and could be cashed in full after five years. It needs 95% of them to agree to the plan before it will proceed.