Blue City Update - The Bahraini's are back. AAJH just won't go away...

OK. About time for another serious post.

Before that, a Dragon pat on the head for the Omani press lately - Muscat Daily, Times of Oman & stalwart print-teenager Y Magazine all doing much better lately with publishing more real stories. Mainly focused on social issues, fair enough, but it's a start. Keep it up. And the 123 Orion gig tonight is SOLD OUT. I'll publish a report of how it went after the weekend. Wish I could have attended myself, but must instead complete a quick trip to Europe now the ash is clearing. (Those Swiss elves need feeding...)

So, what of Blue City?

Well, the contractors have been kicked out. Saleh Miri, the CEO, has 'resigned' and leaves at the end of July. The team recently found a couple of hundred million dollars under the sofa left over from the bonds and are using it to pay themselves off as they all look for work elsewhere.

The recent press announcement from AAJH, the Bahraini company who originated Blue City, was a bolt from the blue, as it were. Anees and his partner used their contacts to ensure it wasn't reported in any of the Omani papers, but Ahmed Janahi (the AAJ of AAJH) had a press conference last week about how they are heading back to Al Sawadi to rescue the project, cavalry style, armed with their original 70% shareholding, a boat-load of Qatari cash, and a seriously high powered politico-lawyer: former Qatari Justice minister Dr. Najeeb.

Dr Najeeb is no pussy folks. He's the guy Saddam Hussein chose to be his lawyer. He is more than aware that the Oman court decisions against AAJH are totally flawed. Local company, and originally 30% partners in Blue City, Cyclone LLC, locked out AAJH once they had obtained the $900 million in bond money.

Photo: Here come the Cavalry. Last week AAJH announce their intention to rescue Blue City...



The 50/50 shareholders of Cyclone are, of course, HRH Sayed Haitham Bin Tariq Al-Said and (no surprise here) one Mr. Anees Issa Mohamed Al-Zedjali, Chairman of ASIT (the holding company)& BCC1 (the phase 1 development company), erstwhile newspaper editor (The Times of Oman is owned and run by his Dad, Sh. Essa Al Zedjali) and blond marketing-talent spotter par excellence...


The Oman Supreme court are still to rule (due next month) on the Omani Court of Appeal's dubious decision reconfirming that AAJH did own 70% of the original Blue City company, but that a technicality meant they couldn't own it and they should be paid off at cost by Cyclone for the shares they didn't actually own to start with. Or something. (It's hard to parse their completely logically inconsistent court ruling. Sorry).

But now that AAJH have the good Dr. Najeeb on board, the Omani courts are in deep shit, IMHO. It's like riding into the tumbleweed strewn town with the legal equivalent of Clint Eastwood covering your back.

The hope is that Cyclone's super-wasta'd up 50% owner, HRH Sayed Haitham (the Sultan's nephew cousin (thx) and and Minister of Culture - that's where the essentially almost free land came from, his far too indulgent Uncle cousin), will realise that 30% of something good, along with a restored project due to the Qatari investors, is a hell of a lot better than 100% of a bankrupt $1 Billion international embarrassment. Whether he's smart enough to realise why the project went tits-up to start with, and has the balls to cut loose his incompetent business partner, is a more interesting question.

So, AAJH is back, and he's making a pretty strong play. It's going to be interesting to see how it ends up.

Also of interest is what the fate will be of the secret 'extra' 7km2 of primo beach front Blue City property that was part of the original almost gift from HM to the first Blue City Holding Company OASIS, but was NOT required to secure the mortgage on the class A bonds and is not part of the original Blue City Master Plan. The officially independently certified land valuation used to underpin the bonds when they were issued, secured on the remaining 25km2 of land for Blue City phases 1, 2, 3, 4 ++, was.... $3.5 Billion.

Hmmm. Even allowing a 50% discount post-real estate crash, not uplifting for the more valuable back front location, and allowing another 50% wastage for roads, utilities and lakes, that's still a sweet $250 million worth of real estate.

No wonder Anees wasn't too worried that his bond holders lost their shirts and the project was driven (with him at the wheel) into bankruptcy. He was still looking at half of that, no matter what, as long as the judges did what they were told.

I also wonder if HRH ever tells his Uncle how things are going with that land he was essentially given to create a new city for 250,000 people...

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.