In a statement property developer Limitless said, it is close to signing an agreement with creditors over around $760 million of troubled debt, marking its third restructuring in a decade.
Dubai state-owned Limitless along with Nakheel, was among the biggest casualties of Dubai’s property crash and the subsequent debt crisis which began in 2009.
It plans on entering into a lock-up agreement, which is typically a precursor to a long form term sheet and definitive documentation, with an ad-hoc group of creditors by the end of this month; it plans on following the same path with its remaining creditors by the end of September to restructure its debt.
The ad-hoc group includes First Abu Dhabi Bank, Mashreqbank, Dubai Islamic Bank, Arab National Bank and Emirates NBD.
A spokesperson for Limitless declined comment.
First Abu Dhabi Bank declined comment; the other lenders did not immediately respond to requests for comments.
As part of the deal, “creditors have the option to settle their debts at a 50% discount or to extend their current positions through a seven-year loan. The restructured loan would be split into U.S dollar and UAE dirhams tranches and would include mandatory pre-payments from asset sales, the documents showed,” said a source while adding, “As part of the restructuring, Limitless would sell land at Al Wasl, a $12 billion project it planned on the outskirts of Riyadh in Saudi Arabia”.
Limitless will keep part of the sale proceeds to boost its cash reserves and fund the business. The group’s first restructuring agreement was in 2012 while its second was in 2016.