Limitless to pledge revenues for $1.2b debt deal

Dubai’s Limitless will pledge its future revenues to service debt repayments as it attempts a second restructuring of a $1.2 billion Islamic loan which banking sources said should be completed ahead of a December deadline.

The state-owned property firm is on track to restructure the debt by the end of the year, when a payment worth a third of the total comes due, two sources familiar with the matter said on Sunday.

Despite a recovery in the local economy which has helped many of the other restructured firms meet their new repayment schedules, Limitless is still struggling to turn its fortunes around.

Chairman Ali Rashid Lootah has held discussions on the terms of the restructuring with a coordinating committee of creditor banks led by lenders including Emirates NBD, Dubai Islamic Bank and Mashreq, the sources said.

“The whole thing will be restructured and finished towards the end of December. Term sheets are under discussion,” said one of the sources, who spoke on condition of anonymity as the matter is private.

“It is likely to be a cash flow-backed restructuring,” the source added. This would see future revenue generated by the company pledged to repay its debts, as opposed to just pushing out the maturity date to give Limitless more time to pay.

A spokeswoman for Limitless on Sunday said private discussions surrounding the restructuring continued but declined to elaborate further.

The company is one of a number of state-owned entities in the emirate who were forced into restructuring debt at the turn of the decade as they couldn’t manage obligations taken on during a boom period once the global financial crisis and a local real estate crash hit.

A former property arm of Dubai World, Limitless restructured the sharia-compliant debt facility in October 2012 after several maturity extensions by a syndicate of lenders.

Under that deal, the company, whose ownership was transferred to the Dubai government as part of Dubai World’s own debt restructuring plan, was given an initial grace period before scheduled repayments between 2014 and 2016.

Chief executive Mohammed Rashed told Reuters in September that the company had held positive talks with creditors and hoped to announce the outcome of the talks soon.-Reuters