Dubai World's lenders have rolled over billions in maturities since May 2009 and a pending $1.2 billion loan payment for its Limitless property unit will also get extended, people familiar with the matter said on Tuesday.
The Islamic loan to Limitless World is due next month. The maturity comes as Dubai World operates a de facto standstill with creditors pending a plan on how it will repay about $22bn in debt.
"It's going to get rolled over, just like everything has been rolled over for months," said one person who spoke on condition of anonymity.
"Hundreds of millions, billions, at the Dubai World level and at Nakheel has come due and all of that has been rolled."
The state-linked firm has been making interest payments as banks extended maturities.
Dubai World, which asked lenders for the standstill last November as it restructures, will present a proposal next month.
As part of talks, Limitless lenders want to be excluded from the overall restructuring and negotiate their loan separately.
Limitless's syndicated loan from 2008 was led by Emirates Bank – now part of Emirates NBD – Emirates Islamic Bank, Arab National Bank and National Bank of Abu Dhabi.
The syndicate also includes Royal Bank of Scotland and nationalised German property lender Hypo Real Estate as well as banks in Malaysia, Pakistan and Taiwan.
"The Limitless lenders don't feel they should be part of the restructuring," the person said, but no decision had been reached on excluding them as the two sides negotiate the value of the property unit's assets.
Most of Limitless's projects, previously valued at more than $100bn, are overseas in Asia and the Middle East.
In Malaysia, the country is developing Puteri Harbour – waterfront homes with individual berthing and high-end condominiums – worth around $450 million as well as International Halal Park, a residential and business complex that is compliant with Islamic law.
In Dubai, its flagship project is the Arabian Canal, a 75-km man-made waterway and 14,000 hectare canalside city valued at $11bn and $50bn respectively. The project is in its early stages.
It also has a mixed development project near the Saudi capital of Riyadh, which includes 55,000 homes as well as mosques, educational facilities, offices, shopping malls and hotels, and will cost $12bn.
"Banks are going to agree to roll over, but the question, what will they get paid for it?" said a banker, speaking on condition of anonymity. "What they'll be looking for is better security, amortising transactions and higher margins."
Consider also reading:
Dubai likely to put non-core assets on sale: Moody’s
Dubai eyes $1.2 bn Limitless loan rollover: sources
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