Property Developer Nakheel Says will Make Sukuk Payment Due on January 19

Dubai World’s property unit Nakheel said on Tuesday that it will make a $10.3 million distribution payment on an Islamic bond, or sukuk, that matures next year. The payment is scheduled for January 19 for the $750 million trust certificates due in 2011, Nakheel said in a statement on the Nasdaq Dubai’s website, without giving further details. “This is to advise that a periodic distribution is due on January 19, 2010. The total funds due will amount to $10,312,500.00 for Periodic Distribution to Certificate Holders,” the statement said. Dubai World is expected to make a formal standstill request to creditors for $22 billion in debt, as part of a restructuring it announced on November 25, which called for a six-month freeze on debt repayments linked to Dubai World and its property units Nakheel and Limitless.

In December, the government of Abu Dhabi announced a $10 billion funding package for Dubai, of which, $4.1 billion was used to repay Nakheel’s sukuk that matured in the same month. Nakheel has two bonds outstanding — a Dh3.6 billion ($980 million) issue maturing on May 13 and the $750 million deal due in January 2011. Neither is guaranteed by the government or Dubai World. Last week, Dubai World moved to quell speculation about its debt restructuring plans saying it will require more time to present the plan and that the next step in the discussions between the company and its creditors would be to agree to a standstill. Creditors are likely to be presented with a draft standstill agreement prior to any formal request from Dubai World. A Dubai World spokesperson said in December the company was aiming to have a restructuring plan in place 
by April.