Nakheel, the real estate giant at the heart of Dubai’s financial crisis, said Wednesday it will pay off all its bank debt of 7.9 billion dirhams ($2.15 billion) ahead of schedule.
“Our payment is covering up to the last instalment (scheduled for) 2018,” Nakheel chairman Ali Rashid Lootah told reporters.
The full amount would be paid in August despite an earlier pledge to only settle 1.65 billion dirhams this summer.
The government-related entity, which built Dubai’s palm-shaped island and a cluster of isles in the form of a world map, is to meet its obligations from its own revenues.
“All this cash is generated from Nakheel’s own income, not from the support fund of the government,” said Lootah.
The bulk of the company’s debt — 6.8 billion dirhams — was due in September 2015, in addition to 200 million dirhams due in March 2016 and 900 million dirhams two years later.
Nakheel had piled up a large mountain of debt during five years of rapid growth in Dubai’s property sector, before the global financial crisis hit the Gulf emirate in 2009.
The company was part of government-linked Dubai World group, which sent jitters in global markets when it signalled in autumn 2009 that it was facing difficulties paying off debts that totalled around $24.9 billion.
The government intervened to buoy the group, bolstered by $20 billion in aid from neighbouring Abu Dhabi.
As part of the restructuring of Nakheel, the government injected $9.5 billion that were converted into equity, separating the company from Dubai World and becoming fully owned by the government.
Nakheel appears to be benefitting from a strong rebound in Dubai, where economic growth has been steady thanks to the trade, transport and tourism sectors after contracting 2.9 percent in 2009.
Dubai’s property sector has also recovered after taking a nosedive during the crisis.
Prices have rocketed amid a rejuvenated demand in the past year, helped by Dubai’s established reputation as a safe haven in a period of regional political turmoil.
In addition to property developments, Nakheel has been involved in retail and hospitality. The company appears set to shift its main focus to those sectors instead of property.
“We’re trying to focus on building assets for Nakheel, for recurrent income, not to depend on property sale,” said Lootah, adding hotels were among the interests for the company.
The company said in a statement that “diversifying Nakheel’s business to increase cash-generating assets” is part of achievements made in the period that followed Nakheel’s restructuring.