A debt restructuring for Dubai-based developer Limitless moved closer after Silver Point Capital sold its share of the AED4.45 billion ($1.2 billion) debt last month, two sources involved in the process said.
U.S. hedge fund Silver Point, one of a minority of creditors holding up a deal, sold half of its roughly $80 million loan to Dubai-based lender Mashreq and the other half to Massar Investments, an investment firm controlled by Mashreq's owners.
A deal can only be agreed once all Limitless creditors have given it their assent.
The Silver Point move will increase pressure on Saudi Arabian lender Arab National Bank, another creditor that had not agreed to the plan as of late last year, to review its position, one of the sources said.
The current status of the bank's position on Limitless was unclear and nobody was available to comment at the bank.
Limitless has been seeking to rebuild its finances after an earlier restructuring triggered by a downturn in the emirate's property industry at the end of the last decade.
Another market slowdown has made this more pressing for the Dubai government-owned company, whose projects include a 200-hectare mixed-use development in Dubai's Jebel Ali, as well as, according to its website, schemes in Vietnam and Russia.
Silver Point, Mashreq and Massar Investments all declined to comment.
A Limitless spokeswoman declined to comment, beyond saying private discussions with creditors were continuing.
In June 2015, the company said it had won the approval of almost 90 percent of banks to a repayment plan involving AED1.9 billion of bank debt. In return, Limitless is asking its 18 creditor banks to agree to extend the term of its debt by two years to December 2018.
The creditor committee is made up of Arab National Bank, Dubai Islamic Bank, Emirates NBD, Mashreq and National Bank of Abu Dhabi.
Limitless said in June its total outstanding bank debt was AED4.45 billion.