Nakheel sukuk unlikely to be paid, all options open-source

DUBAI Mon Feb 22, 2010 5:23pm IST

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DUBAI (Reuters) - Dubai World which is in talks to restructure some $22 billion debt, is unlikely to pay off developer Nakheel's $980 million Islamic bond, a source familiar with the matter said on Monday, and all options are open.

"It is very unlikely that the bond will be paid off," the source. "Incredibly unlikely."

The person, who spoke on condition of anonymity, said all options are on the table for the issue which comes due May 13.

That includes offering new paper for existing debt or, if needed, administration.

Dubai World is negotiating with creditors on $22 billion in debt and will present a proposal in March.

The company rocked global markets in November with plans to request a delay on repaying $26 billion in debt linked to its main propery units Nakheel and Limitless World.

It staved off default on a $4.1 billion Islamic bond linked to Nakheel, after a last minute bailout from Abu Dhabi.

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