Six banks, including Morgan Stanley, have been invited to bid for about 320 million dirhams ($87 million) of Nakheel PJSC’s trade-creditor bonds next week, two bankers familiar with the matter said.
The auction will be held on Sept. 20 and the settlement is expected on Sept. 28, said the bankers, who declined to be identified because the information isn’t public.
Nakheel, the builder of man-made islands of Dubai’s coast, said Aug. 24 it would issue 3.8 billion dirhams of Islamic bonds to its contractors and suppliers as the last step in restructuring $16.1 billion of liabilities. The company plans to issue an additional 1 billion dirhams of the bond as part of the 8.5 billion-dirham program that it has set up.
The bonds, known as sukuk, pay a profit rate of 10 percent and are being used to pay 60 percent of what’s owed to contractors and suppliers. The remaining 40 percent is being paid in cash.
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