Dubai developer Nakheel nears $4.6bn debt restructuring to fund expansion

Dubai developer Nakheel nears $4.6bn debt restructuring to fund expansion

Dubai developer Nakheel is nearing a debt restructuring deal worth $4.6bn, as the group behind landmarks such as Palm Jumeirah accelerates plans to tap into surging demand for property in the Gulf emirate.

The government-owned group has been negotiating with a group of lenders, including local banks Emirates NBD, Mashreq and Dubai Islamic Bank, according to people familiar with the matter. The negotiations are set to refinance 11bn UAE dirhams ($3bn) of existing debt and to raise Dh6bn ($1.63bn) to kickstart development of Palm Jebel Ali, a stalled seafront project.

Demand for coastal properties has risen in recent years thanks to Dubai’s handling of the coronavirus pandemic, with the government keeping the economy relatively open. Russians have also settled in the United Arab Emirates as a haven from the war in Ukraine.

As the wealthy once again flock to Dubai, high energy prices are fuelling a broader boom in the oil-rich Gulf states. Financial groups are moving to the emirate as a base to service the region, where excess revenues are cushioning the blow of inflation felt more acutely elsewhere.

“Nakheel is paying a lower spread and getting more money for new projects, including Palm Jebel Ali,” said one banker on the deal.

Nakheel’s Palm