Dubai's Limitless nears US$1.2 billion debt deal
Source: BI-ME with Reuters , Author: Posted by BI-ME staff
Posted: Tue July 10, 2012 6:12 pm

UAE. Limitless, the indebted property arm of Dubai World, is close to sealing a US$1.2 billion debt deal, potentially ending talks that have lasted more than two years, sources close to the negotiations said on Tuesday.

The developer, a vehicle for most of Dubai World's overseas property investments, has proposed paying interest of 175 basis points over the London interbank offered rate (Libor) under the new terms, one banking source said.

Lenders would be paid beginning in 2014 over a period of three years and interest would be accrued from December 2011, the source said, adding that the proposed interest rate was similar to the rate on the original loan.

Limitless was involved in Dubai's corporate debt crisis in 2009 after the property market crashed. Conglomerate Dubai World transferred ownership of the firm to the government last year.

Most lenders have agreed to the new terms and a deal is imminent, said the sources, who declined to be named because of the sensitivity of the talks. They said restarting some of the company's main international projects would be key to the success of the restructuring deal.

"The restructuring pact is mainly contingent on asset sales. Most of their assets are not very liquid but Limitless can generate cash flows if their key projects in Saudi and Dubai can take off," Ahmed Alanani, a senior executive at investment bank Exotix, which specializes in frontier markets, told Reuters

The state-owned conglomerate has rolled over the loan, owed to a syndicate of banks, several times. The loan was originally due to mature in March 2010.

Limitless said in a statement private discussions were continuing with its lenders but declined to give details of the restructuring talks. However, it said Al Wasl, its US$12 billion project on the outskirts of Riyadh in Saudi Arabia, would be priority project under the restructuring.

"We continue to pursue the project with our partner in Saudi Arabia. We will make further announcements at an appropriate time," Limitless said in the emailed statement.

In a separate announcement on Tuesday, the company said that it and Russian partner RDI Group had secured a 120 million dirham (US$33 million), three-year financing deal with Moscow's Expobank for the continued construction of Zagorodny Kvartal, their mixed-use joint venture project near the Russian capital.

Dubai World signed a final agreement with creditors to restructure US$24.9 billion in debt in March, and the emirate itself has been slowly recovering from the impact of the financial crisis thanks to a revival in trade and tourism.

Limitless, which once attempted to build a 75 kilometer inland waterway called the Arabian Canal, was excluded from Dubai World's restructuring plan, unveiled in March last year.

 

 

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

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QATAR. The turmoil in financial markets at the beginning of this year has prompted some to question whether the US Federal Reserve should have increased interest rates in December.
date:Posted: February 13, 2016
KUWAIT. Kuwait has built up very large fiscal and external net asset positions over many years, which will continue to help it weather the current low oil price environment; The overall fiscal and external balance sheets will remain strong, backed by a significant stock of financial assets.
date:Posted: February 12, 2016
INTERNATIONAL. A Syria in which the regime and IS, rather than other rebel groups, are the only real domestic players turns Bashar al-Assad into a pivotal cog in the fight against jihadism. That is something Saudi Arabia cannot allow to happen. To turn the tide, it needs a United States that is engaged and willing to do its bit.
KUWAIT. Kuwait has built up very large fiscal and external net asset positions over many years, which will continue to help it weather the current low oil price environment; The overall fiscal and external balance sheets will remain strong, backed by a significant stock of financial assets.
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