(MENAFN- The Arabian Post) Dubai real estate developer Limitless has taken a step closer to securing a second restructuring on debt outstanding from Dubai's property crash six years ago.
It said on Monday it would repay 2.07 billion dirhams ($564 million) to creditors and has won the approval of almost 90 percent of banks to extend its remaining debt to December 2018.
Limitless is seeking to follow in the footsteps of Dubai World, another state-controlled company, which in March was given approval to end court proceedings relating to its $14.6 billion debt restructuring deal, signed in the wake of the financial crisis.
That paved the way for Dubai World to push through a deal outside of court.
Limitless will fund repayment, equivalent to 42 percent of its 4.45 billion dirham total debt pile, by selling half its land bank in Saudi Arabia for 2.07 billion dirhams to Saudi Real Estate Company, said Limitless chairman Ali Rashid Lootah told a press conference.
Limitless's talks with creditors have been arduous. It missed a $400 million payment deadline linked to a previous restructuring deal on Dec. 31, though its prior request for an extension meant it was not technically in default.
Under the latest deal, it will repay 1.9 billion dirhams in bank debt, including an early payment of 411 million dirhams not due until December, and a further 176 million dirhams to trade creditors.
In return, Limitless is asking its 18 creditor banks to agree to extend its debt by two years to December 2018. The company is hoping to secure agreement from the remaining 10 percent of creditors for its plans "very quickly", said Lootah.
"We are asking for 2018 as we think it is achievable and think it gives us ample time to enable us to perform in our development and obligations towards creditors," said Lootah. He said by 2018 he hoped the company would be debt free and making a profit.
Lootah refused to comment on the performance of Dubai's property market.
Dubai residential property prices are likely to fall by 10 to 20 percent this year because of subdued demand, slower economic activity and downbeat investor sentiment, credit rating agency Standard & Poor's said in a report this month.
Limitless is focusing on its 200-hectare Downtown Jebel Ali project, close to the new site for the Dubai Expo in 2020. It also plans to develop its remaining land bank in Saudi Arabia, and is continuing with its project in Russia, Lootah said, without elaborating
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