Dubai’s Limitless nets extension on $1.2bn loan

Move marks fifth loan extension for troubled real estate developer, say sources
Dubai’s Limitless nets extension on $1.2bn loan
Limitless sees good demand for its residential units, said head of projects, Bahaa Abouhatab
By Bloomberg
Mon 08 Aug 2011 04:20 PM

Limitless received a fifth extension on a $1.2bn loan as the
real-estate developer controlled by state-owned Dubai World works on a
restructuring plan, two bankers familiar with the plan said.

The Islamic syndicated loan has been extended until Sept. 30
from July 31 without a change in the terms, the bankers said, declining to be
identified because the information is private.

The time will allow Limitless to complete a debt
restructuring deal with creditor banks, one of the bankers said.

“Private discussions continue with our lenders,” Limitless
said in an emailed response to questions today. The loan, originally maturing
in March last year, got two three- month, one six-month and one four-month
extensions.

Limitless, whose projects include the mixed-use Downtown
Jebel Ali development in Dubai and another mix-use development in Riyadh, Saudi
Arabia, raised the loan in dollars and UAE dirhams in 2008 from a group of 18
banks, according to a company statement at that time. Emirates NBD and National
Bank of Abu Dhabi helped raise the loan, while Royal Bank of Scotland Group were
among the lenders.

A spokesman for Emirates NBD, the UAE’s biggest bank by
assets, declined to comment as did a spokeswoman for Royal Bank of Scotland. A
spokesman for National Bank of Abu Dhabi, the UAE’s second-biggest bank,
couldn’t immediately be reached.

Limitless is seeking to extend the tenor of the loan by four
to five years and plans to pay no interest over that period, the bankers said.
Interest on the loan will accrue and be repaid along with principal when the
loan matures, they said.

The developer has cash that it plans to use to fund property
developments in Saudi Arabia and Dubai, one of the bankers said, without
providing a specific amount. The lenders are seeking to use the funds to pay
interest, the banker said.

Limitless plans to restart work on four office and
residential buildings in the Galleries development next year, Bahaa Abouhatab,
head of projects for Limitless said in an interview on June 16. The work will
complete the eight-building development, adding more than 600 apartments and
one million sq ft of office space, he said.

Dubai World, one of the emirate’s three main state-owned
holding companies, reached an accord with creditors to alter terms on about
$25bn of debt in March.

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