Al Ghurair, one of the key trade creditors of Dubai World, will begin to receive stalled payments from Nakheel beginning June.
A top official from the company also said the 10 per cent profit on the sukuks offered to contractors is "very generous".
Nakheel on Monday said it had started to sign deals with trade creditors. It said it would pay 40 per cent of trade creditors' bills in cash, with the remaining 60 per cent transferred to a tradable sukuk (Islamic bond) that would pay 10 per cent annual return, if 65 per cent of contractors agree.
The cash payment will be made as soon as the consent target is reached. "If they give the sukuk bearing 10 per cent returns, then that's very generous of them. You see, 10 per cent is good," Essa Abdulla Al Ghurair, Vice-Chairman, Al Ghurair, told Emirates Business.
"We are in the construction business and we have done a lot of jobs for them," he added. "This will give us a boost to recover some of our money. It's difficult to tell how much our outstanding accounts receivables are, but by June they said they will give the money. If 65 per cent of people accept, they will begin the disbursement."
Al Ghurair, a family conglomerate in real estate and shopping malls, manufacturing and investments, also owns Arabian Aluminium, Arabian Concrete Products, Arabian Marble, Arabian Mix and Arabian Foundations Engineering.
He said the real estate sector still faces a problem but recovery will be seen next year. He said other sectors such as food, tourism and the service industries have already recovered.
Despite the resilience of the food sector, he said, the company remains cautious in new investments and opts to focus on existing projects.
Besides the140,000 tonne Grain Silo Storage Port facility, set to be completed in the fourth quarter this year, most of the planned projects by Al Ghurair Foods (AGF) remain at the drawing board stage. "We have a few things in the pipeline - like a partnership in Saudi Arabia - but nothing has yet materialised," said Al Ghurair.
AGF, which he chairs, saw a seven per cent growth in revenue to Dh2.5 billion in 2008. He said the food division, which forms seven per cent of the group's turnover, is looking at a 20 per cent increase this year to Dh3bn.
The firm has also teamed up with ETA Star Group to pursue high-voltage transmission projects in the Middle East and North Africa.
"It's getting slow here, so we're going outside. We have certain capabilities [so] may as well use it elsewhere," Al Ghurair said. "We are partners with ETA in the power sector. We are going out to other GCC countries as well as North Africa such as Angola and Ghana. We're putting up a cement factory in Angola as a contractor."
By Karen Remo-Listana
© Emirates Business 24/7 2010
