In UAE newspaper The National today is a nice article on the on-going slow motion financial train wreck that is Blue City.
Black cloud hangs over the future of Oman's Blue City
Bradley Hope
Last Updated: March 12. 2010 1:38AM UAE / March 11. 2010 9:38PM GMT
Blue City, Oman’s largest property development, could be forced into liquidation under plans being considered by the company’s board of directors, The National can reveal.
The board of Al Sawadi Investment and Tourism Company (ASIT), the parent company of the project, last month sent out a notice calling for investors to vote on the “dissolution of the company and filing subsidiaries”. The meeting has since been postponed to Monday.
“The company has lost all of its capital and have no reasonable expectation to meet their debt payment obligations when due,” the letter said. It was signed by Anees Issa al Zadjali, the chairman of ASIT.
Richard Russell, the managing director and chief executive of Blue City’s first phase, said in a statement the meeting had been postponed to allow a restructuring proposal to be made by some bondholders.
“Blue City is pleased to comment that the board meeting has been postponed for a short period to March 15, 2010, since certain Class A note holders have requested time to present a restructuring proposal for consideration by the Blue City shareholders,” Mr Russell said.
“Unlike most projects in the Middle East, our homebuyers in Blue City are secured by mortgage over the project assets of Blue City.”
...
Photo: Annes Al Zedjali, Chairman of a bankrupt company who started out with 32km2 of prime ocean-front real estate and almost a billion dollars in cash.This has been predicted by Muscat Confidential for some time, with the latest post in January here for example. I continue to expect the scheme will be 'restructured' by the mortgage-backed bond holders, enabling them to get all the land and the works completed to date. GCC money is already coming in to the project. This has been the plan for some time.
Property developing ace and part-time paper boy Chairman Anees Al Zedjali has clearly figured that he's ridden this pony as far as he can, especially now that Bank of NY Mellon have firmly closed the taps. More legal disputes will now be on the way as the tussle between the various bond holders, credit default insurers, escrow account trustee Bank of NY Mellon, shareholders, contractors, sub-contractors and holding companies gets going. The lawyers will pick the bones clean.
Meanwhile, the executives of Blue City and its failed Chairman continue to sit on their fat bank accounts. Remember the project borrowed over $900 million dollars, and has continually pumped itself up on a steam of self agrandising hallucinations. If I was Bank Mellon, the bond insurer or a less secured bond holder I'd be making inquiries as to whether civil or indeed criminal charges should be instigated. There may be no holidays in Florida for Anees for a while...
While publicly the blame will no doubt be laid on the global credit crunch, project delays and AAJH etc etc, probably aided and abetted by support from the pages of Times of Oman, the gross financial mismanagement will presumably be ignored.
Eventually a scaled down phase 1 will be completed, with the hotel, marina, golf course and a load of villas, owned mainly by Kuwaitis, Qataris, Saudis and Iranians. While every businessman in Oman who wants to raise foreign capital, even for a project that's real, will see significantly higher interest payments and a lot less interested lenders. Contractors will factor in higher default risk and counterparty premium. This will damage the entire Oman economy, to an extent. But Anees will be OK.
So that's alright then.
Why do you have obsession with Omani businessmen and accuse them of all sorts. Were you molested by any when you were a kid ??
ReplyDeleteFinancial crisis hit everyone with no exception and maybe Anees did all he can to save the company but was overwhelmed with collapse of real estate like THOUSANDS of western bankers and real estate agencies.
Al-Sawady
Al Sawady
ReplyDeleteLOL. It's not an accusation. I would point you to the statement just made by Mr Al Zedjali himself (as reported by The National): "The company has lost all of its capital and have no reasonable expectation to meet their debt payment obligations when due." He's the Chairman, and is thus accountable, for the money and the abysmal English grammar too.
This huge loss was caused by:
- needlessly redesigning the project in a greedy attempt to push out 70% shareholder AAJH, who had done the original design, when things still looked rosy and after the $925 million had been secured.
- as a result, delaying the project by at least 18 months.
- paying vast and suspiciously expensive fees to loads of consultants.
- paying very high salaries to a bunch of people who failed to deliver the project, even when this was obviously a totally irresponsible strategy from back in late 2008.
- all the while scoffing at those who expressed legitimate concerns right from the start that the project was a turkey.
- in the process damaging the reputation of the whole country, while ensuring large amounts of borrowed money were progressively transferred to inside interests.
Oman has some fantastic businessmen. In my opinion, Mr Anees is not one of them. But someone is going to get a deal, by effectively obtaining all that land (not just phase 1), all the escrow money and the works already completed for probably around $250 million. It will be fascinating to see who managed to get such a deal...
But thanks for dropping by.
“Why do you have (an) obsession with Omani businessmen…….” said Al-Sawady -
ReplyDeleteprobably because the blog is about Oman rather than the shady dealings in Somalia ! suggests I
And talking of Oman – any news about Yiti & Sama Dubai
Well who didn't see this coming? You got it right UD when you say that there are a lot of good businessmen in Oman and that Anees isn't one of them. I have through my work in Oman met some incredible business titans and I have also met Anees a number of times. He stands out from the crowd in his arrogance and sense of self-entitlement. He also threatens people who dare speak out about his failed project. Anees, is this the way to run a successful business where you are seeking international investors? By threatening anyone who dares tell the truth about your project? If it weren't for your name and connections, in this globalised world, you would probably be my shoe shiner. You have no business talent. LOSER! I look forward to dancing on the grave that is Blue City.
ReplyDeleteDid you know your blog is blocked again? any idea why?
ReplyDeleteUD,
ReplyDeleteYou website is again blocked. The typical omantel screen is coming telling clearly that the site is blocked. I entered using the trick given by you i.e by "translating" to chinese!!!!.
This time you are blocked because you have criticised the english grammar knowledge of Omanis!!!.
Oh dear dear Dragon, blocked again ... An** must have wasta.
ReplyDeleteTouched some nerves here Dragon...you're blocked again!
ReplyDeleteCX
That was fast :)
ReplyDeleteSama Dubai are history. There are talks with another company to take over the development, but at the moment just talks!
ReplyDeleteSo why were you blocked this time....was the original picture of Mr Anees more compromising (his hand in the till perhaps?) : )
Good news. Now the big question is, like Sharekhan was booted out, Ponzi guys were punished, will the big fish like these influential guys, pay the price for their fraudulent dealing or be let free to roam around???
ReplyDeleteAnnes is a crying shame for Oman!
ReplyDeleteThis is great stuff. In previous discussions (end-2008) on this blog 'Stakeholder', who later appeared to be member(s) of the notorious BCC1 managment team, stated:
ReplyDelete"..one way or another this project is going to be a great success.
The fact that many out there believe the opposite just creates a huge opportunity for those who can see a little bit forward.
This project has its angels..."
Good thing that most of us could see more than just a little bit forward...!
OK. Where did all that money go? Dunno, but my guess is some of the wicked-wasta probably went to recently getting Muscat Confidential blocked! If the full story could ever be writ about the Blue City boyo's narcissistic adventure I'm also sure it would be too wacko even for Hollywood script writers. Further, I wonder if there has ever been a cashfest miss-spend in Oman's history? Will it turn out to be a new Greek tragedy? Again I dunno, but it does seem more akin to a modern-day Greek comedy than anything else. 'Stakeholder' and his ilk should be put in Stocks and have rotten eggs thrown at them. What a bunch of duffers. The damage to Oman's international reputation makes you cringe.
ReplyDeleteDragon, what's the latest news on BCC1? We would like an update plz!
ReplyDeleteThanks. Paula
Dragon, what's the lastest update on BCC1?? Would like an update. Are the birds still singing or has the cookie finally crumbled?
ReplyDeleteresult
ReplyDeleteWednesday, April 21, 2010
Blue City project in Oman to revive
Posted on » Wednesday, April 21, 2010
MANAMA: Qatari investment company Bin Muhanna Holding Group yesterday announced its participation as a main partner in the major Blue City project being set up in Oman by the UDM Group and Bahrain-based A A J Holding.
Bin Muhanna Holding chairman Dr Najeeb bin Mohammed Al Noaimi said the firm were happy at becoming part of the major project.
"We will now approach international banks, investors and insurance companies in order to restore confidence in this project, which has been facing obstacles and hindrances, and realise its objectives."We will also co-operate with all the partners, particularly A A J Holding, which started the project in 2004."
He said the company will work closely with all investment and financial centres to revive the project and realise its development objectives. He said the project has faced major setbacks and obstacles, which were created by some investors, and this has reflected adversely on its reputation.
"We will now rise to the occasion of this partnership, and we will provide financial and legal assistance through our long experience in this field to develop the project and reach positive results."
A A J Holding president Ahmed Abu Baker Janahi said the company is proud of this partnership which comes at a time when the project needs investors who have financial and legal leverage. "This initiative will be a qualitative step and a much needed addition to the project that will enable it to overcome the obstacles and hindrances which have obstructed its development and affected its reputation on a global level," he said.
"We will also invite every sincere person or party wishing to develop the project and we hope that all other investors will serve the project's high interests and the interests of all local, regional and global partners who are keen for the success of the project, particularly when its failure will affect the investment climate in the entire region," he added.
Published in
http://www.gulf-daily-news.com/NewsDetails.aspx?storyid=276226
Posted by Thani Harith al Mahrouki at 09:32