By Arif Sharif
June 09, 2010, 4:26 AM EDT
June 9 (Bloomberg) -- Essdar Investments Ltd., a Cayman Island-based fund, agreed to buy $655.5 million of outstanding notes backed by Oman’s stalled Blue City development at a 37 percent discount.
Essdar, an investment partner with Dubai-based Essdar Capital Managers Ltd., will hold 99 percent of two notes sold in 2006 by Oman’s Blue City Investments 1 Ltd. following a tender offer, it said in an e-mailed statement from Dubai today. The notes had a combined $661.5 million of outstanding principal as of November, 2006, the company said.
Blue City, an hour from the capital, Muscat, was supposed to produce more than 200 villas, 5,000 apartments, four hotels, two golf courses and a clubhouse, according to the notes’ prospectus. A total of $925 million was raised from bondholders to finance construction, which started in 2006.
Essdar said today it will pay $630.3 per $1,000 for $399 million of outstanding Class A1 notes due 2013 and $624.8 per $1,000 for $262.5 million of Class A3 notes due 2016.
Blue City, a $20 billion real estate project central to the Oman’s economic transformation, was envisioned as a new community for more than 200,000 people. It missed sales targets as real estate speculators left Middle Eastern markets and a legal battle between the project’s owners undermined confidence.
To contact the editor responsible for this story: Edward Evans at Eevans3@bloomberg.net