Nakheel takes over Limitless

Abdul Basit (With inputs from Agencies)  www.khaleejtimes.com

DUBAI — Property developer Nakheel, a unit of Dubai World that has built palm-shaped islands, has been given the responsibilities of Dubai’s Limitless with an aim to achieve the best results for both the developers.

“The Higher Committee to oversee Dubai World and its units decided to entrust the board of Nakheel with handling responsibilities of Limitless in a step aimed at setting united strategies and programmes to deal with the real estate sector,” the Dubai Media Office said in a statement on Saturday.

The move would also help take advantage of technical and administrative personnel of Nakheel and Limitless so as to achieve the best result for developers, the construction sector and project investors, according to the statement.

Limitless, which once attempted to build a 75-kilometre inland waterway called the Arabian Canal, was excluded from Dubai World’s restructuring plan, unveiled in March. Limitless has already succeeded in rolling over a $1.2 billion Islamic loan due in March.

In helping transform the emirate as a regional hub, Dubai World and its property units, Nakheel and Limitless, used loans to finance real-estate projects such as the Palm Islands. The companies struggled to refinance their borrowings as the global credit crunch choked off lending.

Dubai World, one of the emirate’s three main state-owned business groups, reached an agreement on May 20 with its main creditors to restructure $23.5 billion of loans. Nakheel began making payments on June 30 to its biggest contractors as the Dubai World-owned property company seeks to alter terms on $10.5 billion of unpaid bills and loans amid falling property prices in the emirate.

The Dubai World-owned property company said it would pay Dh4 billion to its 1,000 trade creditors and added it would also be restarting several projects shortly.

The move follows initial payments made to trade creditors whom the company owed Dh500,000 or less. The payments began after the announcement of its restructuring plan in March this year.

In March, Nakheel had announced a comprehensive restructuring plan of its debt and liabilities. The plan enables Nakheel to offer creditors 100 per cent of agreed amounts owed.

Under this proposal, the Government of Dubai, through the Dubai Supreme Fiscal Committee, committed to provide approximately $8 billion directly to Nakheel to fund operations and settle liabilities.

abdulbasit@khaleejtimes.com