Nakheel approaches banks for $200m financing

Dubai's Nakheel has approached banks for a $200m financing in its first attempt to tap capital markets in over two years, and about a month after it completed a complex restructuring of its massive debt pile. "Nakheel is approaching banks and discussions with them are progressing well," a Nakheel spokesman said on Sunday. The indebted developer is now wholly-owned by the Dubai government as part of its former parent Dubai World's debt restructuring. The developer, which overstretched itself building islands in the shape of palms and other ambitious projects, will use the funds for new projects that include the expansion of the Dragon Mart mall, one of its retail assets. This is the first time that the developer would seek to raise fresh financing since 2009, when a property market collapse forced Nakheel to restructure its $16bn debt. Dubai has already given as much as $8.71bn to the developer. The company announced in August that it completed the restructuring and would soon deliver pending projects and pay investors. Dubai's property boom ended in 2008, with home prices plunging by about 60 percent forcing many developers to abandon projects. Some of Nakheel's ambitious projects like Palm Jebel Ali, another palm-shaped island stretching into the sea, is yet to be complete. Nakheel's chairman Ali Rashid Lootah said its full year profit should be in-line with its 2010 results, bolstered by its leasing and retail businesses. The indebted developer issued $1.03bn under the first tranche of the $1.31bn sukuk earlier this year to trade creditors.