Dubai real estate developer Limitless has said that a restructuring deal agreed earlier in October and covering $1.2bn of debt will give the firm until 2016 to pay off its lenders.
Under the terms of the deal, lenders to the company will be repaid between 2014 and 2016, with trade creditors offered a bullet repayment in 2015. Trade creditors will not be paid any interest on their outstanding claims on the company, while banks will continue to be paid interest on the restructured loan, that was originally due to be repaid in 2010.
“This chapter is closed and we are looking forward to a great new future for Limitless,” says Ali Rashid Lootah, the chairman of Limitless and Nakheel, another Dubai real estate firm that had to restructure billions of dollars it owned to banks and contractors.
The Nakheel restructuring progressed a much faster pace than Limitless. Nakheel announced its intentions to restructure its debts in November 2009, along with Dubai World, the government-owned investment firm which at the time was the parent company of Nakheel. By mid-2011, the company had completed those negotiations. In contrast, Limitless has only just concluded its restructuring after more than two years of talks. Limitless will become directly owned by Dubai government as a result of the restructuring.
The company will now focus on developing several new projects, particularly the $8.6bn Al-Wasl development in Riyadh, Saudi Arabia. Lootah says the company is already in talks with banks about raising funding for that scheme, which will cover over 14 square kilometres and include a mixture of residential and commercial space. Lootah says that by the end of the year, he hopes the financing for the project will be place and in the first quarter of 2013, it hopes to appoint contractors. It is also moving forward with projects in Vietnam, Russia and at Jebel Ali in Dubai.
In a similar strategy to Nakheel, Limitless is shifting focus away from projects, which require huge infrastructure investment to concentrate on schemes that can be delivered more easily. As a result schemes such as Limitless’s $11bn Arabian Canal, a 75km long man-made canal in the south of Dubai, and Nakheel’s plans to develop additional archipelagos in the shape of palm trees off the coast of Dubai have been put on hold. “We consider Arabian Canal to be long-term projects that we will revisit at a later date,” says Lootah.