(Bloomberg) --

Dubai developer Meydan is set to meet its creditors next week to discuss a $2.6 billion debt restructuring plan aimed at giving it financial breathing space, people familiar with the matter said.

PwC has been working with the company to put together a proposal, which will be presented at a meeting with bank creditors, the people said, asking not to be named because the information is confidential.

Meydan’s total debt amounts to about $4 billion, of which $2.6 billion requires restructuring, the people said. Under the plan, the company will ask creditors to extend repayments on that amount for a period said to be between eight to 10 years, the people said. The company also intends to sell assets to raise fresh funds, they said.

Spokespeople for PwC and Meydan declined to comment.

Long under pressure from an anemic domestic economy, the owner of one of the world’s most opulent horse racecourses has also had to contend with the coronavirus crisis that’s hurt Dubai’s tourism and transport industry. The developer may be looking to negotiate a reprieve from creditors while the emirate recovers from the global pandemic.

Properties, Hospitality

Meydan’s debts are mostly linked to the construction of a giant mall project that remains unfinished. Although its real estate and hospitality business suffered during the health emergency, the company’s problems emerged years ago when it was unable to pay contractors, prompting Dubai in 2019 to set up a separate tribunal to hear all claims against the developer.

Meydan’s debt is mostly held by local UAE banks but also a small number of foreign lenders such as Standard Chartered Plc, the people said. The creditors are looking to hire a financial adviser, the people said.

Standard Chartered didn’t immediately reply to a request for comment.

PwC’s debt proposal is a so-called “amend and extend” arrangement, whereby creditors are asked to postpone the repayment deadlines for the borrower. Meydan’s restructuring is overseen by the management of Nakheel, another prominent Dubai developer.

Dubai has fared relatively well during the global pandemic, rolling out a fast vaccination program and opening its doors to foreign tourists and workers sooner than other countries.

The revival of business activity in recent months has led to a small rebound in the property market. Still, a string of poor earnings has recently laid bare the damage from the pandemic: Emirates Group just reported its first loss in decades and its owner, the Investment Corp. of Dubai, booked a $5.1 billion loss for 2020.

(A previous version of this story removed reference to trade creditors in second paragraph.)

(Updates with management of Nakheel overseeing Meydan’s restructuring in fourth paragraph below subheadline.)

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