Stonehill Capital Said to Block $1.2 Billion Limitless Deal

  • Developer said to tell banks 98% of creditors agreed terms
  • Limitless is restructuring $1.2 billion loan for second time

U.S. hedge fund Stonehill Capital Management LLC is blocking a second restructuring of a $1.2 billion loan in Dubai-based developer Limitless LLC, according to five people with knowledge of the matter.

Limitless told banks that creditors holding more than 98 percent of the debt have agreed to new restructuring terms for the loan and that the terms need 100 percent support before a deal can proceed, two of the people said, asking not to be identified because the information is private. Stonehill Capital holds about $15 million of the loan, they said.

Limitless began talks to restructure the $1.2 billion Islamic loan for a second time in 2014. Its most recent proposal includes paying creditors in three installments in 2016, 2017 and 2018 and to raise about $650 million from selling land around Dubai’s main port in Jebel Ali and other assets. The company raised $517 million from selling half of its land bank in Saudi Arabia last year, though it is holding on to the money until creditors agree to the restructuring, people with knowledge of the matter said at the time.

Last month, U.S. hedge fund Silver Point Capital LP sold its share in Limitless’ $1.2 billion loan, people with knowledge of the matter said. It sold half its approximately $80 million of debt to Mashreqbank PSC of the United Arab Emirates and the remainder to Massar Investments LLC, an investment company controlled by the bank’s owners, they said.

Emirates NBD PJSC, National Bank of Abu Dhabi PJSC, Dubai Islamic Bank PJSC, Mashreqbank PSC, Arab National Bank and Silver Point Capital LP were part of the creditors’ committee that was negotiating a deal on behalf of lenders, three people familiar with the company’s restructuring said last year. Silver Point had opposed the latest terms and its sale was seen as paving the way for a final agreement, people with knowledge of the matter said last month.

Stonehill Capital didn’t immediately respond to questions. Limitless said it continues to hold private negotiations with lenders.

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