Azernews.Az

By Bloomberg

For all the progress made tackling Dubai’s debt, some issues refuse to go away.

Creditors to Limitless LLC are trying to arrange a meeting amid speculation the Dubai-based developer sold land in Saudi Arabia, five people familiar with the matter said. Limitless is trying to restructure a $1.2 billion Islamic loan for the second time, and creditors say proceeds from any sale should go toward settling the debt under the existing restructuring deal, according to three of the people, who asked not to be identified because the matter isn’t public.

Dubai government-related entities have spent years since the financial crisis renegotiating with creditors to delay payments and reorganize loans. Shares in Amlak Finance PJSC, an Islamic mortgage provider, will resume trading next week after a suspension of more than six years while it restructured $2.7 billion debt. Any major asset sale by Limitless could complicate talks with lenders, according to Commerzbank AG.

“If this sale has in fact occurred then it will raise demands from creditors as they would expect part of the proceeds should first be allocated toward an early repayment,” Apostolos Bantis, a Dubai-based credit analyst at Commerzbank, said by e- mail yesterday. “There’s a probability that such a sale may also be a breach of the restructuring agreement if in fact it has occurred without the consent of the creditors.”

Saudi Project

Limitless may have sold land in the Al Wasl project in Riyadh, said the people. Lenders have asked the company for clarity on the possible deal and have yet to receive a response, two of the people said.

“If there are any developments, our stakeholders will be the first to know,” Limitless spokeswoman Rebecca Rees said by e-mail on Monday, declining to comment further.

The company began talks with lenders to restructure its debt for a second time last year. It got approval from about 85 percent of its creditors for a three-month extension to a loan payment due Dec. 31, Chairman Ali Rashed Lootah said in January.

The developer planned to build a $12 billion, 1,400 hectare mixed-use community project on the land 17 kilometers north-west of Riyadh, according to a 2009 statement on its website. The development was due to be constructed in five phases and have 55,000 homes once completed.

Saudi Real Estate Co. may have bought the land from Limitless, two of the people said. The Riyadh-based company said in October that it got a 2.2 billion-riyal ($587 million) loan to finance a land purchase in Riyadh from National Commercial Bank. The developer didn’t respond to calls and e-mails seeking comment.