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Dubai property developer Limitless struggles to emerge from mortgage crisis

Dubai Limitless

The Dubai based real estate company, Limitless, has been struggling for 12 years to emerge from the mortgage crisis that struck the United States and the world in 2009.

Limitless said it is in the process of implementing the third restructuring, which could last for 20 years, according to the new schedule.

Dubai Limitless

Limitless offered secured lenders, that is, banks and commercial creditors, two options, according to a recent presentation of creditors.

It appears that the company owes about 2.8 billion dirhams, equivalent to $762 million, according to Bloomberg, which quoted people familiar with the matter who requested anonymity.

Creditors receive either an advance payment of 50% on the funds they are owed for settlement or agree to a 7-year restructuring of two billion dirhams of debt facilities, in accordance with the terms contained in the document.

The company informed creditors last year it was appointing consultants for the third restructuring, after it had failed to implement some of the previous agreements it had concluded with the concerned banks in recent years.

A spokeswoman for Limitless told Bloomberg “discussions with our lenders are ongoing, but, as the talks are private and confidential, we are not at liberty to share details”.

Huge projects

Limitless played an important role in the massive rise of Dubai in the global real estate and financial arena, and it was before the start of the real estate collapse and the crisis that followed it, and was behind many mega projects, including a man-made canal that would cut across the desert but was never completed.

But, as a result of the faltering global markets, the company was unable to pay its debts and was forced to restructure on several occasions, similar to other government entities such as Dubai World that owns it.

At that time, the companies affiliated with the government conglomerate, including real estate company Nakheel.

In a related context, sources say that Dubai’s debts have always been like a talisman in the eyes of investors, but that matters have become more mysterious since the repercussions of the Coronavirus hit the economy.

During the last twelve months, two companies, one with ties to the government of the emirate and the second with ties to its ruler, said that they would not make hundreds of millions of dollars’ worth of payments in fulfillment of debts, in a rare move in Dubai, the business center of the Middle East, where debt renegotiation is commonplace, and state support is often implicit.

Keep reading: Coronavirus Cut UAE Banks’ Profits In Half In 2020

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