In fact, I'm reliably informed things are so bad that BCC1 couldn't even make the June salary payment for their own staff on time as the bank account was so empty. LOL.
Expect a pseudo-Government rescue soon, probably in the form of some Government controlled entity (such as one of the pension funds) buying a big bunch of their properties.
Even then its difficult to imagine them avoiding technical default. Given the outstanding payments due contractors, and the current market, even the Government won't give them the $400+ mln they need. Re-negotiations with bond holders are essential. In fact, rather than buying the properties it would probably be cheaper for the State Investment fund to buy the bonds directly for a big discount.
What a fantastic job the Chairman of the board is doing. At least he found the time to entertain Michael Jackson...
Any comment 'John'?
Oman's Blue City downgraded on default fears
Jul 15, 2009
Fitch Ratings downgraded Tuesday Oman's Blue City Investments 1 Ltd on fears of default of a loan payment.
The Blue City Company 1 had raised in 2006 $925 million real estate bond financing to fund the development of a $20 billion the Blue City project, or Al Madina Al Zarqa, in the Sultanate of Oman.
Fitch Ratings downgraded Blue City Investments' $262.5 million class A3/A4 due October 2016 to 'CCC' from 'B+', the rating agency said in an emailed statement.
Blue City's $143 million class B1/B2 due October 2016 was also downgraded to 'CCC' from 'B and the $50.5 million class C due October 2016 was downgraded to 'C' from 'B-'.
A $70 million class D due October 2016 was lowered to 'C' from 'B', it added.
"Blue City Company 1, or BCC1, has already breached each of sales tests 1 to 4 and on the 7 November 2009 interest payment date will be tested against sales test 5 for the first time," said Fitch.
"Should BCC1 fail to meet sales test 5, which measures whether some $455 million of aggregate collections will be made by that date, an immediate mandatory prepayment of the loan will be triggered.
"In this event the loan will be considered in default," it said, adding that current aggregate collections stand at approximately $77 million."