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EghtesadOnline: Nakheel PJSC, the developer of Dubai’s palm-shaped islands, has repaid an Islamic bond, bringing an end to a debt restructuring saga that pushed the emirate to the brink of default in 2009.

The Dubai government-owned company transferred funds to agent Deutsche Bank AG yesterday to cover a 4.4 billion-dirham ($1.2 billion) sukuk maturing this month, Chairman Ali Rashid Lootah told reporters at a press conference Monday in Dubai. The securities, which have a profit rate of 10 percent, were issued to contractors and suppliers in 2011 as part of a plan to reorganize more than $16 billion of liabilities, according to Bloomberg.

Dubai World, Nakheel’s former parent and one of the emirates’ three main holding companies, roiled global markets in November 2009 when it said it may halt payments on about $25 billion of debt. Dubai had to borrow $20 billion from the United Arab Emirates central bank, Abu Dhabi and two of its banks to help it pay liabilities.

“Today we celebrate the completion of Nakheel’s restructuring,” Lootah said. “It was a challenging period and we managed to deliver on all our commitments ahead of time and launch new projects.”

Since the financial crisis and the debt restructuring, Nakheel has rebounded from losses by boosting recurring revenue from hotels and retail outlets as well as developments on the Palm Jumeirah island and other projects. Lootah said the company achieved its business plan two years ahead of schedule and will be debt free on Aug. 25.

Property Sales

Still, property prices in the emirate have been under pressure as a slump in oil prices leads to an economic slowdown, causing some firms to trim their workforce. The value of real estate sales fell almost 30 percent in the first seven months of the year, according to data from the Dubai Land Department.

Dubai’s property market is stable and Nakheel will award more than 8 billion dirhams in construction contracts this year, Lootah said.

Profit for the first half rose 4 percent to 2.95 billion dirhams, Nakheel said last month. Revenue from the sale of villas and apartments at Emaar Properties PJSC, Dubai’s biggest developer, rose in the second quarter, the company said earlier this month.

Nakheel will be signing loan agreements “with more than one bank this year,” as bank financing is cheaper than raising money through Islamic bonds, Lootah said. An initial public offering of shares in Nakheel is unlikely in the near future, he said.

Dubai Nakheel Dubai Debt Saga Islamic bond