Halcrow ready to accept Nakheel's offer on debt

Halcrow, the major British engineering company, is "on the brink" of signing the debt payment offer from the Dubai World-owned Nakheel, the UK firm's managing director in Dubai says. Halcrow, which is owed money for a group of medium-sized projects including a district cooling plant on Palm Jumeirah, last year posted a 57 per cent drop in profits due to late payments from Dubai developers, leading to 60 job cuts in its Middle East division.

Under Nakheel's repayment plan, trade creditors are being offered 100 per cent of their agreed claims, comprising a 40 per cent cash payment and 60 per cent in the form of a publicly tradable security with an annual return of 10 per cent. "There are still a couple of finer details to sort out," said David Yaw, Halcrow's managing director for the Middle East. "Nakheel has a specialised team of people working on this … we hope to have it finalised in a few weeks or a month at the most."

Nakheel said last month it had secured agreement on 50 per cent of claims totalling US$1.6 billion (Dh5.87bn) from its trade creditors. The Palm islands developer, which is restructuring $10.5bn of debt, said it would start paying contractors and suppliers once it had secured the consent on 65 per cent of claims from creditors. Riad Kamal, the chief executive of Arabtec Holding, which is owed money on the Al Furjan villa community in Dubai, said the company had signed the offer.

An official at another contractor, who asked not to be named, said his company was unhappy with Nakheel's offer although it had "no other choice" but to try to thrash out a settlement. agiuffrida@thenational.ae