Dubai's Arabtec Expects Unpaid Bills to Fall After Nakheel's State Bailout

Arabtec Holding PJSC, the United Arab Emirates’ biggest builder, expects cash flow to improve now that the government is helping Dubai-based developer Nakheel PJSC pay its bills to contractors.

Arabtec, also based in Dubai, is owed about 4.7 billion dirhams ($1.3 billion) by its clients, a figure that hasn’t changed much over the last five quarters, Chief Financial Officer Ziad Makhzoumi said in an interview in Beirut today. The government has pledged to pump $8 billion into Nakheel to help it pay suppliers and complete projects.

“The issue was Dubai, and that is being sorted out now,” Makhzoumi said. “In other areas we don’t have any issues.”

Dubai, the second-biggest sheikhdom in the United Arab Emirates, is unlikely to return to the pace of growth it saw in the years before the credit crisis, he said. The emirate’s property market went from the best-performing in the world to the worst in a year after a lack of credit hurt buyers and developers.

“The rate of growth will have to change,” Makhzoumi said. “What we will see now is normal growth of an economy.”

Arabtec, which has an order book of 23 billion dirhams, gets more than half its revenue from the U.A.E. The company is bidding for projects including the Abu Dhabi airport expansion, a Guggenheim museum and the Mafraq Hospital, the CFO said.

“If all the projects that we started continue and the new projects we are bidding for are awarded, then probably substantial revenue will come from outside the U.A.E.,” he said. “But the U.A.E. market is still very important for us.”

To contact the reporter on this story: Massoud A. Derhally in Beirut, Lebanon at

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