Nakheel Reports A Slash In Its Trade Claims By 85%Tuesday, August 07, 2012
According to news, a spokesperson from Nakheel highlights that the amount Nakheel had to pay as a result of creditor claims has been slashed by around 85%. He said that Nakheel has negotiated to reduce the amount and these negotiations saw the value of trade debts fall by more than 3 quarters. He also highlighted that many of the claims that exceed reasonable amounts are being settled by Nakheel professionally and amicably.
He further said that in order to ensure that the settlements are acceptable for both parties, Nakheel has hired the services of external legal advisors and independent claims consultants. On average, settlements have been made around 15% of original claims made by contractors and similar figures are expected for remaining claims as well.
The statement of a spokesperson also highlights that engaging external advisors by Nakheel is a fair and transparent approach on its part for settling claims and those who don’t reach amicable settlement with Nakheel have the contractual right to go for arbitration. The chairman of Nakheel, Ali Rashid Lootah said last year that negotiations are a standard part of industry because contractors always exaggerate their claims.
Lootah also said that out of total creditors’ claim of AED 8 bn, the firm had settled AED 3 bn and further expects to lower it by AED 1 bn in value of remaining invoices. Nakheel is a state owned developer which, after contributing to the emirate’s debt woes, is now gradually moving towards recovery.
Nakheel revealed earlier this month that its profits jumped by 36% in the first half of year. Compared from AED 562 m in year ago period, the net profit of Nakheel increased to AED 767 m during the first six months of the following year. On the other hand, revenues during the first half of the year rose to AED 3.1 bn.