DUBAI, United Arab Emirates (AP) — Dubai’s developer Nakheel behind the famed man-made palm-shaped islands said Wednesday it is repaying 7.9 billion dirhams, or roughly $2.15 billion this month — nearly four years before the last installment is due.
The indebted state developer was scheduled to repay the credit over three installments between September 2015 and March 2018. Nakheel said in a statement that it made early repayments of 2.35 billion dirhams ($640 million) in February. The remaining 5.54 billion dirhams ($1.51 billion) is being paid and cleared this month, it said.
Nakheel will pay the $1.51 billion to 31 banks, of which almost $940 million will go to UAE banks and $570 million to overseas banks. The company said it will also pay interest of around $35 million covering the six months from end of February to end of August.
The company’s credit-fueled building spree was at the heart of Dubai’s financial crisis in 2009 following a property market crash the year before. The state developer was part of Dubai World, but separated during financial restructuring.
It received a multi-billion dollar bailout from the Dubai government, which itself was lent billions of dollars from the Abu Dhabi-based federal government. Nakheel was almost faced with default and had to suspend its projects on its large man-made islands.
Nakheel said earlier this year that strong real estate growth and improved economic conditions in Dubai boosted its finances and allowed it to make early debt repayments.
It has also promised to repay trade creditors $1.23 billion in Islamic bonds, known as sukuk, that mature in 2016.