(Adds context, analysis)
By Praveen Menon
DUBAI, April 8 Dubai government-owned property
firm Limitless is asking creditors for more time to repay a $1.2
billion debt facility, its chairman said on Tuesday.
"We are revising our business plan. We need some more time.
We are in discussion with banks and they are very cooperative,"
Ali Rashid Lootah told Reuters.
"We have been talking to the banks for a while now and they
know the situation. There will be delays. We have a payment plan
but this may just be shifted slightly from the earlier
While Lootah wouldn't elaborate on why the company was
seeking a new repayment timetable, he said it was "still healthy
and still in good shape".
The news suggests that while Dubai is recovering strongly
from its 2009 debt crisis and property market crash, with most
companies that have restructured loans succeeding in working
through their obligations, the process is not uniform and
significant obstacles remain.
Limitless, a former property arm of Dubai World,
restructured the Islamic debt facility in October 2012 after
several maturity extensions by a syndicate of lenders including
Royal Bank of Scotland and Emirates NBD.
Under the deal, the company was given an initial grace
period before scheduled repayments between 2014 and 2016. The
revised loan carries an interest rate of 175 basis points over
the London interbank offered rate, according to Reuters data.
The International Monetary Fund estimates the Dubai
government and state-linked entities will face $78 billion worth
of debt maturing between 2014 and 2017, an amount which it has
described as "challenging".
However, the Dubai property market is rebounding rapidly
from its crash - prices are up 33 percent year-on-year according
to consultancy JLL - and this is helping many companies.
Debt repayments by Dubai World, which restructured $25
billion of obligations, are much larger and more important than
the Limitless facility.
Mohammed al-Shaibani, chief executive of sovereign wealth
fund Investment Corp of Dubai, told Reuters last month that
Dubai World had the means to repay a $4.4 billion obligation in
May 2015 and expected to make some future repayments early.
(Editing by David French and Andrew Torchia)