Banks "squeezing us for everything" - Limitless boss

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Chairman Ali Rashid Lootah said Limitless, which was battered by the emirate’s 2009 property crash, expected to have fully paid up everything it owes by 2016.

Chairman Ali Rashid Lootah said Limitless, which was battered by the emirate’s 2009 property crash, expected to have fully paid up everything it owes by 2016.

The head of Dubai developer Limitless said that the indebted firm’s creditors were “squeezing us for everything” following the restructuring of a US$1.2bn loan announced last week.

Chairman Ali Rashid Lootah said Limitless, which was battered by the emirate’s 2009 property crash, expected to have fully paid up everything it owes by 2016.

“We’re generating [revenue], we’re paying all of our interest on time – you can check with the lenders – they’re squeezing us for everything,” said Lootah, who is also boss of Nakheel, another indebted property developer in Dubai.

Limitless, which is in the process of transferring its ownership from conglomerate Dubai World to the emirate’s government, last week said it had cleared obligations to 92 percent of its trade creditors.

Lootah refused to answer a question from Arabian Business on the possibility of Nakheel and Limitless merging once the two were firmly under government control.

The firm said it was now focused on overseas projects, such as its Al Wasl development in the Saudi capital Riyadh, as well as developments in Moscow and Vietnam.

“For Moscow and Vietnam we’re already raising finance for the initial stage and for the next stages, if we need more finance, we will arrange it,” Lootah said. “The most important thing is that we kick-start the projects.”

Construction on the US$450m Halong Star in Vietnam is due to begin late this year, while the US$3.5bn Zagorodny Kvartal development in the Russian capital broke ground last year. Neither projects have forecast completion dates.

He added that there was “huge interest” from lenders to finance the US$8.6bn Al Wasl project, although it had not yet been secured. “For Saudi Arabia, different financial groups have shown interest in partnership with us and we’re exploring a lot of possibilities,” Lootah said.

Limitless said though that it had no plans to revive Arabian Canal, a US$11bn 72km long development announced in 2005, which has been on hold since Dubai’s property market collapse in 2008. “It’s a long term project, it will depend on the market situation,” Lootah said. Infrastructure work on its mixed use development Downtown Jebel Ali is ongoing.

Limitless was not part of Dubai World’s US$24.9bn restructuring announced in March 2011. The company, along with fellow Dubai developers including Nakheel, was hit hard by the emirate’s property slump in 2008 that caused real estate prices to plummet by as much as 60 percent, causing many projects to be delayed or cancelled.

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Posted by: Bernard M.A. Doff

Kindly note the typo, it should be Mr Looter.

I feel that the banks should be as generous as the investors who naively donated their life savings to the company's coffers, without prospect of return.

Posted by: Bugle

When you are not used to honouring your commitments, then when you are forced to do so, it must seem like being squeezed. In fact this is how the real world functions. Too bad that investors cannot also apply the same pressure as banks.

Posted by: Peter Higgins

Well explained - I would love to see the look on his face if a management consultant sat him down and explained it thus.

Posted by: Baloo

I'm convinced that Mr Lootah only makes these comments to amuse himself with the comments of outrage from readers.

Quite simply, no one can be that deluded to be real..!!

Posted by: Paolo C

No wonder I never saw a circus in Dubai. It probably would be the largest in the world. Shame on you all.

Posted by: Red Snappa

It is utterly unsurprising that creditors are squeezing Limitless for every last drop of repayment they can extract, debt situations such as the one under discussion are simply put, dragging the whole financial system down in the emirate.

Banks have an average exposure to the property sector of 21.5% of their total deposit base, if I understand the UAE Central Bank's report on the subject correctly, so keeping the screws on both Limitless and Nakheel can only be construed as sound practice on their part.

Ongoing restructuring of debt, related to an industry showing only limited signs of recovery, with a some would say massively over optimistic outlook, is the reason behind such a decline in business confidence in the previous three years. Let us not kid ourselves, launching a tranche of property projects again does not make the future look rosy by itself, there has to be a remarkable set of economic fundamentals to underwrite what remains on the face of it, a high risk strategy!

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