Dubai's Nakheel hopes to sign debt deal next week

Dubai's troubled real estate giant developer, Nakheel, is hoping to sign a debt-restructuring deal when it meets with lenders next week, a local newspaper cited the firm's chairman as saying.

"We are meeting with bankers on July 14 and hopefully they will sign the contract," Nakheel's chairman Ali Rashid Lootah told the Khaleej Times daily.

The developer behind Dubai's iconic palm-shaped man-made islands, part of the debt-laden Dubai World conglomerate, is reportedly negotiating to restructure some $10.5 billion of debt. Last week it said it started making 40 per cent cash payments to its major contractors, with the remaining 60 per cent to be paid in the form of publicly tradeable securities that pay an annual return of 10 per cent.

The payment is part of a restructuring plan announced by Dubai in March, in terms of which the government offered to inject $9.5 billion into Dubai World, in order to restructure some $23.5 billion of debt.

According to the proposal, Nakheel should cease to be part of Dubai World to become directly owned by the government of Dubai.