A successful resolution would bring a further measure of closure to Dubai's financial crisis. The developer, Nakheel, is the main property arm of the debt-laden government conglomerate Dubai World, which earlier this month announced it had nearly completed its own $24.9 billion debt restructuring.
Among Nakheel's creations are islands in the shape of palm trees and a map of the world off Dubai's coast.
Nakheel Chief Executive Chris O'Donnell said the company has received a positive response from its creditor banks to its restructuring proposal, and is now finalizing details with a core group of lenders owed much of the debt.
"We're targeting the end of the year to be complete. And we're in pretty good shape for that," he told The Associated Press.
The talks are under way both with financial creditors such as banks, and with dozens of contractors still waiting to be made good on late payments left over when Nakheel found itself short on cash.
Nakheel began making payments to some of its nonbank creditors earlier this year.
O'Donnell said the state-owned company has won support from about 85 percent of nonbank creditors still owed money from the firm. They have been offered repayment of 40 percent of their claims in cash, and the remainder in a type of bond.
Nakheel presented bank lenders its plan to restructure at least $10.5 billion of debt in July. They also have been offered revised terms that will extend the length of many loans.
Nakheel's restructuring project has been moving ahead alongside similar efforts by its parent company, Dubai World. The conglomerate shocked global markets last November by unexpectedly calling for a debt standstill and new terms on its loans — effectively an admission that it and Nakheel couldn't pay their bills.
The crisis renewed concerns about the lack of transparency in the oil-rich Gulf and brought a multiyear building boom to an abrupt end. Property prices in Dubai have fallen by at least half from their peak in 2008 amid a glut of partially filled buildings.
Hundreds of billions of dollars' worth of building projects are now on hold, including a skyscraper launched by Nakheel that would be among the tallest in the world.
Many of the islands it built remain empty.
O'Donnell said Nakheel's more ambitious projects, such as the skyscraper and a Donald Trump hotel, remain on hold.
However, the company has restarted work on more modest residential developments, such as the Al Furjan villa project begun this week.
As part of the ongoing restructuring, Nakheel will eventually be split off from its parent and directly owned by Dubai's government. O'Donnell declined to set a target date for the split, but said "it'll be either completed or defined in the legal documents as the restructuring is finalized."
