Onyx Investments Ltd bought Blue City bonds

By Camilla Hall - Mar 30, 2011 8:00 PM GMT+0400

Onyx Investments Ltd., a fully owned subsidiary of the government controlled Oman Investment Fund, bought all of Essdar Investments Ltd.’s holdings of Blue City bonds.

A house for rent in Wadi Adai, Oman

Property Description (Not available anymore)

A well maintained 2 storey house, comprehensive maintenance was just completed, 5 Bedrooms including a master bedroom, 1 sitting room, 1 family hall, 1 big kitchen with brand new cupboards, 4 bathrooms.

Features

- Good location.
- Outside sitting areas (including a sitting area on the top).

Location

Located just at the entrance of Wadi Adai, 2 to 3 minutes drive to Wadi Adai Round about, close to Ruwi downtown, main hospitals, major malls and all city activities.

Availability

Available from 1 November 2010.

Price (1 US Dollar= Riyal Omani 0.388)

Riyal Oman xxx/month for a family
Riyal Oman xxx/month for Bachelors.

Contact

Phone number:                       
Email:              

Cyclone LLC wins Blue City case in Oman

By Zainab Fattah

zfattah@bloomberg.net

Editors: Andrew Blackman, Tony Aarons.

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net

July 7 (Bloomberg) -- Bin Muhanna Holding Group and AAJ Holdings Co. said they lost a ruling over ownership of Oman’s Blue City, a stalled $20 billion real estate project.

Oman’s Supreme Court ruled last week that Cyclone LLC owns 70 percent of Blue City, Najeeb Al-Noaimi, chairman of Bin Muhanna, said in a telephone interview yesterday. Qatar-based Bin Muhanna and Bahrain’s AAJ are now reviewing their legal options, Al-Noaimi said. Othman Janahi, an AAJ board member, confirmed the decision.

The ruling is part of a three-year legal battle for control of a project that’s central to Oman’s economic transformation. Sayyid Haitham bin Tariq al Said, the minister of culture and heritage and a member of the royal family, owns 50 percent of Cyclone.

“We plan to file lawsuits at the London Court of International Arbitration and the ICC International Court of Arbitration in New York,” Al-Noaimi said.

Blue City, an hour’s drive from the Omani capital, Muscat, was supposed to include more than 200 villas, 5,000 apartments, four hotels, two golf courses and a clubhouse. A total of $925 million was raised from bondholders to finance construction, which started in 2006 and has missed sales targets as real estate speculators left Middle Eastern markets.

Cyclone sued AAJ in September 2007, claiming the company’s purchase of a 70 percent stake in Blue City was invalid and the stake should be handed over to the Omani company. AAJ won at the first hearing only to lose to Cyclone after an appeal. That was upheld by last week’s ruling.

In April, AAJ formed a partnership with Bin Muhanna. Al- Noaimi is Qatar’s former justice minister and was once a defense attorney for Saddam Hussein. Cyclone’s chairman, Anees al- Zadjali, declined to comment on the verdict when contacted by phone yesterday. Calls to AAJ’s chief executive officer, Ahmad Janahi, weren’t answered.

Published in

http://www.businessweek.com/news/2010-07-07/bin-muhanna-aaj-lose-ruling-over-ownership-of-oman-s-blue-city.html

Blue city needs funding

Gulf News

By Manoj Nair

Dubai The coming weeks represent a make-or-break period for Oman's Blue City master-development, with a lot resting on whether new partners with the required knowhow and capital can be brought on board. These attributes will be a pre-requisite in getting the much-stalled project back on its feet and moving.

"Attracting the right sort of partner to come in at this stage is high on any turnaround agenda for Blue City," said a source who has been associated with the development ever since it was launched in 2006. "Fresh funding is what the development needs and needs now."

It is still early days on whether there are any interested parties out there willing to come in to revive the real estate project, which at 25 square kilometres — including 9 kilometres of beachfront — was one of the largest such attempted in a region known for its developmental excesses (It used to be called developmental flourishes in those days).

25-year plan

Located at some distance from the capital Muscat, the land is fully secured to the original promoters and was to be developed over 25 years and feature as many as 10 phases. Until now, work on just about 10 per cent of Phase I is all that has been done.

One of the problems, according to real estate analysts, was that the original masterplan envisaged Blue City as a high-density mixed-use development. There was to be residential, high-end and mid-priced, tourism-specific components, and offices.

After the launch in 2006, the project went into a period of quiet as the promoters wrestled with fund-raising issues and designing a workable masterplan. It was then revived in 2008 and construction did start on site. But the property markets collapsed towards the end of the year and the project has since been in limbo.

Given the way the region's property markets are behaving, it would take an immense leap of faith for any developer to commit to supporting a development that would take 20 years and more to realise its full potential.

If that's so, a stripped-down version could be attempted, said the source. "There's a lot of residual value in the land that could be unlocked by selling portions of it to third parties and leaving a core for the master development itself," the source added. "Selling some of the land would also help in raising fresh cash and would merit serious consideration in any future plans for Blue City."

But of more pressing importance is an upcoming verdict that is to be delivered by Oman's Supreme Court on an equity ownership dispute involving the two shareholders in Blue City Company 1, the operating entity set up to handle the development.

Equity ownership dispute

The dispute has already moved through the lower courts. "Once the Supreme Court delivers its verdict, and it looks it could happen any day now, that will be the tipping point for any progress on the ground at Blue City," the source added.

"Moreover, for any interested third-party to come into the picture now would require a clear understanding on the shareholder structure. If the stalemate is removed, it clears the ground for a lot of things."

These developments will be closely watched by Essdar Investments, the investment company which recently completed the buyout in the secondary market of a bond issued by Blue City Company 1 in late 2006. As of June 7, Essdar Investments was holding 99 per cent of the Class A1 and A3 Notes of the Blue City Company 1 bonds.

Mohammad Sotoudeh, CEO of Essdar, said: "With the credit crunch, more and more entities are finding it difficult to refinance. Essdar's strategy is to look at such businesses and develop and execute a strategy which can extract value for our investors and the businesses."

Interestingly, the Blue City bond pulled in an overwhelming level of interest from investors based in the US and Europe, and less so from the Gulf.

With little happening on the project from the construction side, it did not take long for the bond to slip to as low as 19 cents to the dollar by early 2007. It was around that time or thereafter that Essdar decided to acquire the bond in the secondary market.

The process culminated with the June 7 announcement that Essdar owns 99 per cent of the bond issue. "This investment is a landmark transaction in regional distressed debt and is a significant step towards Essdar's regional strategy," said Hamad Abdullah Al Shamsi, chairman of Essdar.

Essdar officials were not willing to comment on what their immediate priorities would be or the course of action they intend to take.

But other investment banking sources were quite willing to do so on what Essdar Capital could try. "As the Class A bondholder, and the sole one by the looks of it, they can try and enforce the issue by insisting on land sales to recover their investments," said a banker.

"They will also have access to whatever cash reserves are there on account of the bond issue," the banker added.

Enforcement can be a time-consuming, taking anywhere between 18 to 24 months.

The other option would be to take on the more strenuous task of restructuring the project and make it work at the third attempt.

"Whilst the media and public opinion focus has traditionally been upon the real estate aspects, this is primarily a tourism-driven development," said Christopher Steel, managing partner at Savills Oman.

"The planned hotels, commercial and associated facilities appear to be on track and are of intrinsic importance to any aspects of the residential real estate components.

Financial restructuring

"Any restructuring of the finances for the development must be viewed as a most positive step in ensuring that site works continue at a realistic pace to meet the occupational demands of the burgeoning tourist arrivals into Oman."

But the banker reckons the restructuring can prove onerous. "It must involve all parties — the shareholders, subordinated bondholders and contractors," the banker said.

"It will take some doing especially as the environment is still not conducive for major real estate initiatives. The next two to three months will be decisive."

For a development that has stuttered from one crisis to another since 2006, two to three months cannot be that long.

© Gulf News 2010. All rights reserved.

Published in

http://www.zawya.com/story.cfm/sidGN_24062010_250635

Essdar to buy shares of Oman blue city

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

Published in

http://www.businessweek.com/news/2010-06-09/essdar-to-buy-655-5-million-of-oman-blue-city-notes-update1-.html

A villa for rent in Azaiba, Oman

Property Description (Available from 1 September 2011)

A well maintained villa, 5 bedrooms, 1 office, 1 study room, a big sitting room, 2 spacious family halls, 2 kitchens (1 in a detached block), 5 stores (1 in a detached block, 3 inside and 1 in a car park) and 7 bathrooms.

Features

- Electric gate with remote controls.

- Video door phones.

- A security system connected to 3 phone lines.

- UPVC Double glazed windows>

- Thermal blocks protecting the villa from heat.
- Split units

- Good location.

- A Detached block (a kitchen and a store, toilet, 1 room, 1 toilet and a laundry).

- Covered car park for 2 vehicles with a store + car park for other 7 vehicles.

- Outside sitting areas.

- Sea view on the top

  

Location

Located close to the main Sultan Qaboos Road  in Azaiba phase 8 (10 minutes drive from the airport) and not far from 18th November street.

Availability

Available from 1st September 2011

Price (1 US Dollar= Riyal Omani 0.385) 

Negotiable depending on payment method

For Residence Use Riyal Omani 1500 / month 

For Commercial Use Riyal Omani 4500 / month

  

Contact

Phone number: + 968 9521 64 68

Email: presentport@gmail.com