Dubai’s Limitless Holds “Positive” Talks On Debt Restructuring – CEO

Dubai government-owned property firm Limitless has held positive talks with creditors as it seeks to re-negotiate the terms of a $1.2 billion debt facility which has already been restructured once before, its chief executive told Reuters on Sunday.

“We have a revised business plan which we are discussing with creditors. The discussions have been positive and we hope we can announce the outcome of these talks soon,” Mohammed Rashed told Reuters on the sidelines of a real estate event.

The discussions were centred on re-negotiating the terms of the debt, he said without giving any further details.

The news is a reminder of the debt challenges still facing some Dubai companies, despite a robust rebound in the economy after the global financial crisis and a local real estate crash at the end of the last decade.

That period saw billion of dollars-worth of debt belonging to Dubai state-linked companies restructured, with most agreeing with creditors to extend the debt’s lifespan to allow for assets to recover in value before being sold to service payments.

Limitless, a former property arm of Dubai World, restructured the Islamic debt facility in October 2012 after several maturity extensions by a syndicate of lenders including Royal Bank of Scotland and Emirates NBD.

The company, whose ownership was transferred to the Dubai government as part of Dubai World’s restructuring plan, was given an initial grace period before scheduled repayments between 2014 and 2016.

The real estate firm’s debt obligations are small compared to other state-owned companies, most notably its former parent. The conglomerate is offering creditors a series of incentives to lengthen its $25 billion debt restructuring deal, including shares in global ports firm DP World as collateral, Reuters reported earlier this month.

The International Monetary Fund has estimated the Dubai government and state-linked entities will face $78 billion worth of debt maturing between 2014 and 2017.