22 July 2009
Essdar Investments Limited ("Essdar") has today announced a public tender offer (the "Offer") to purchase the outstanding Class A Floating Rate Senior Secured Unrestricted Notes (the "Notes") issued by Blue City Investments 1 Limited ("Blue City") with outstanding principal amount of US$ 661.5 million.
The Notes are part of the securitisation in November 2006 of a USD925m financing for Blue City Company 1 S.A.O.C. (BCC1) for the development of an upmarket residential, hotel and leisure resort on the coast of the Indian Ocean at Al Sawadi under the Project Al Madina A Zarqa, located 90km to the west of Muscat, the capital of the Sultanate of Oman.
The Offer may increase Essdar's aggregate Note holding to more than 75%. Essdar sought and obtained the consent of Blue City for a notice of the Offer to be made available to Note holders through the Euroclear and Clearstream clearing systems.
Essdar Capital Limited, regulated by the Dubai Financial Services Authority, is the financial adviser.
Interesting. A quick look over the Essdar Capital website here results in finding a more in-depth news release on the above mentioned buy-out. The deadline appears to be Next Wednesday (August 5th) at 17:00 GMT - so 8pm here in Muscat then. The next day is the published date for announcing whether the proposal was successful.
Bearing in mind that Fitch Ratings downgraded Blue City's bonds to CCC on the 15th of July, the current bond holders may very well be interested in getting out now and potentially cutting their losses. Considering that the Tender Agent for this deal is Citibank, and that these deals cost a lot of money to organise (I'd imagine the fees for this will be measured in the millions) - one might consider that this may be a formality to buy the bonds.
I don't know, and I guess none of us will know, until next Thursday the 6th of August when the announcement will be made by Essdar Capital as to whether their bid has been successful or not.