State-backed developer said to have inked initial deal to revamp overdue Islamic loan
Limitless, a property developer controlled by Dubai World, and its creditors reached an initial agreement on terms to restructure a $1.2bn loan, three bankers familiar with the talks said.
The company has been given a seventh extension on the loan until the end of April as the restructuring plan is concluded, the bankers said, declining to be identified because the discussions are private. A formal agreement may be signed early February, they said.
The Islamic loan was originally due to mature in March 2010.
“Private discussions continue with our lenders,” Limitless said in an emailed response to questions from Bloomberg News on Monday.
Limitless, whose projects include the mixed-use Downtown Jebel Ali development in Dubai and another development in Riyadh, Saudi Arabia, raised the loan in dollars and United Arab Emirates dirhams in 2008 from a group of 18 banks, according to a company statement at the time. Emirates NBD and National Bank of Abu Dhabi helped raise the loan, while Royal Bank of Scotland Group was among the lenders.
A spokesman for Emirates NBD, the UAE’s biggest bank by assets, declined to comment as did a spokeswoman for RBS and a spokesman at National Bank of Abu Dhabi.
Limitless is seeking to extend the tenor of the loan by four to five years and plans to pay no interest over that period, two bankers familiar with the deal said on Aug 8. Interest on the loan will accrue and be repaid along with principal when the loan matures, they said at the time.