Nakheel is well on its way to dealing with the company's final group of creditors - home buyers.
About Dh4 billion (US$1.08bn) worth of homes, or almost half of the company's long-term liabilities to buyers, have been swapped for other properties closer to completion in Nakheel's portfolio, said Ali Rashid Lootah, the chairman of the company.
"We are supporting them," Mr Lootah said in his office on Dubai's Jumeirah Road. Wearing a tan kandoura and fingering a string of large, red prayer beads, he added: "They have a choice."
Dubai World has convinced banks to agree to a $24.9bn restructuring plan and is near to reaching an agreement with construction contractors to accept a 40 per cent payment in cash and an Islamic bond for the remainder of its debts. But the progress of restructuring for home buyers has not been previously disclosed.
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Thousands of people made advance payments on homes planned for projects in Dubai, such as Palm Deira, Palm Jebel Ali and the Waterfront, but construction has been put on hold since 2009 because of the global financial downturn and falling regional property values.
Nakheel has offered buyers to either swap for another project that is closer to completion or poised to restart construction, or to wait five years for a refund of their down payments. Nakheel said last year it had restarted construction on the Jumeirah Park, Al Furjan, Jumeirah Village, Jumeirah Islands Mansions, Jumeirah Heights Clusters and Al Badrah projects.
Michael Lunjevich, the head of the property practice at the law firm Hadef & Partners, said last month that finding a reasonable solution for buyers of homes on stalled projects was one of Dubai's most pressing concerns because it would help restore the reputation of the emirate after debt problems and widespread construction delays. "Many of these investors invested their absolute life savings for their dream property," he said. "It's a challenge because you can't replace [a home] with something that's not like anything that they've promised you." One home buyer bought a property on Palm Jebel Ali for Dh12 million at the peak of the market with a mortgage. Nakheel originally sold it to a different client for Dh4m who then sold it on. The value of the alternative villa the current owner is being offered is the original Dh4m. He would still have the mortgage to pay for the remainder.
Nakheel has been focusing on improving its services to home buyers and residents as it moved from a period of restructuring to recovery, Mr Lootah said. Outside advisers, such as AlixPartners and Deloitte, were finished with their work at Nakheel, he said, and business was returning to normality.
"I am comfortably finished with restructuring," he said. "Now we are back on these small issues. Our team is focusing on the details."
Under Mr Lootah, who was appointed as the chairman of Nakheel last March along with a new board of directors, the company is re-engineering its culture to a more cautious approach with spending and to finding value for its government shareholder and clients. He said he was a "proud" member of the more realistic group of Emiratis - known colloquially as the "old school" - who had been put in charge of Dubai companies by the Government.
"That is what I have been telling all these young people: they should run Nakheel the way you would run your own business," said Mr Lootah, who spent the past six years as a private businessman in Dubai and before that as a Federal Government employee. "You should be honest. You should be careful. If that is old school, I'm proud to be of that school."
He said staff at Nakheel, once known for its brash spending and outsize marketing budget, were now more accountable.
"They know they are going to be challenged and asked questions," Mr Lootah said. As for himself, he says he is accountable to the new board and beyond that, Dubai's Supreme Fiscal Committee, which is co-ordinating government companies.
"I'm accountable, too," Mr Lootah said.