Dubai property group Limitless seeks advisers for restructuring

Aerial view of the Sheikh Zayed Road, following the outbreak of coronavirus disease (COVID-19), in in Dubai, United Arab Emirates, March 26, 2020. (REUTERS)
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Updated 30 March 2020

Dubai property group Limitless seeks advisers for restructuring

  • S&P Global Ratings said the virus outbreak had exacerbated the supply-demand imbalance in Dubai’s real estate market, where the credit rating agency estimates real estate prices are “approaching levels seen at the bottom of the last cycle in 2010”

DUBAI: Dubai-based property developer Limitless told its creditors last week that it is looking to appoint legal and financial advisers to work on a financial restructuring plan, a company document seen by Reuters showed.
Limitless, along with Nakheel, was among the biggest casualties of Dubai’s property crash and subsequent debt crisis that began in 2009.
The company, formerly owned by state investment vehicle Dubai World, was one of a number of entities in Dubai that were forced to restructure their debts.
“Owing to the liquidity crisis, we are confirming that the company will be unable to pay accrued profit at the end of March 2020,” Limitless said in a letter dated March 23 and sent to Mashreqbank, which works as an agent for a group of the company’s creditors.
A Limitless spokeswoman said: “We have written to our creditors as a first step to finding a solution that will benefit all stakeholders.”
Limitless said in the letter a team from Dubai World was advising the company’s board of directors.
The letter said the company was committed to agreeing “on a restructuring plan for the benefits of the participants and other creditors.”
“To this end, we are in the final stages of engaging legal as well as financial advisers to assist us.”
In 2016, Limitless reached a second restructuring agreement with lenders to pay around $1.2 billion in bank debt in three installments in December 2016, 2017 and 2018, but has only repaid part of it, sources have said.

HIGHLIGHTS

● Limitless, along with Nakheel, was among the biggest casualties of Dubai’s property crash and subsequent debt crisis that began in 2009.

● The company, formerly owned by state investment vehicle Dubai World, was one of a number of entities in Dubai that were forced to restructure their debts.

Dubai — where property prices have been declining for most of the past decade — is bracing for a financial hit as the coronavirus crisis has impacted sectors vital to its economy, such as tourism and construction.
S&P Global Ratings said the virus outbreak had exacerbated the supply-demand imbalance in Dubai’s real estate market, where the credit rating agency estimates real estate prices are “approaching levels seen at the bottom of the last cycle in 2010.”

 


EU pledges to stay green in virus recovery

Updated 29 May 2020

EU pledges to stay green in virus recovery

  • To help economies from the 27-nation bloc bounce back as quick as possible

BRUSSELS: The European Commission pledged on Thursday to stay away from fossil-fueled projects in its coronavirus recovery strategy, and to stick to its target of making Europe the first climate neutral continent by the middle of the century, but environmental groups said they were unimpressed.

To weather the deep recession triggered by the pandemic, Commission President Ursula von der Leyen has proposed a €1.85 trillion ($2 trillion) package consisting of a revised long-term budget and a recovery fund, with 25 percent of the funding set aside for climate action.

To help economies from the 27-nation bloc bounce back as quick as possible, the EU’s executive arm wants to increase a €7.5-billion ($8.25 billion) fund presented earlier this year that was part of an investment plan aiming at making the continent more environmentally friendly.

Under the commission’s new plan, which requires the approval of member states, the mechanism will be expanded to €40 billion ($44 billion) and is expected to generate another €150 billion in public and private investment. The money is designed to help coal-dependent countries weather the costs of moving away from fossil fuels.

Environmental group WWF acknowledged the commission’s efforts but expressed fears the money could go to “harmful activities such as fossil fuels or building new airports and motorways.”

“It can’t be used to move from coal to coal,” Frans Timmermans, the commission executive vice president in charge the European Green Deal, responded on Thursday. “It is unthinkable that support will be given to go from coal to coal. That is how we are going to approach the issue. That’s the only way you can ensure you actually do not harm.”

Timmermans conceded, however, that projects involving fossil fuels could sometimes be necessary, especially the use of natural gas to help move away from coal.

The commission also wants to dedicate an extra €15 billion ($16.5 billion) to an agricultural fund supporting rural areas in their transition toward a greener model.

Von der Leyen, who took office last year, has made the fight against climate change the priority of her term. Timmermans insisted that her goal to make Europe the world’s first carbon-neutral continent by 2050 remained unchanged, confirming that upgraded targets for the 2030 horizon would be presented by September.

Reacting to the executive arm’s recovery plans, Greenpeace lashed out at a project it described as “contradictory at best and damaging at worst,” accusing the commission of sticking to a growth-driven mentality detrimental to the environment.

“The plan includes several eye-catching green `options,’ including home renovation schemes, taxes on single-use plastic waste and the revenues of digital giants like Google and Facebook. But it does not solve the problem of existing support for gas, oil, coal, and industrial farming — some of the main drivers of a mounting climate and environmental emergency,” Greenpeace said.

“The plan also fails to set strict social or green conditions on access to funding for polluters like airlines or carmakers.”

Timmermans said the EU would keep investing in the development of emission-free public transportation, and promoting clean private transport through the EU budget.