Oman’s Blue City Teeters as Bondholders Try to Fix Financing - BusinessWeek

Oman’s Blue City, a $20 billion real estate project central to the country’s economic transformation, is on the brink of liquidation and its fate may hinge on talks between bondholders trying to salvage their investment.

Owners of $661.5 million worth of Blue City bonds are discussing measures to push the project ahead, including trying to reduce the number of bondholders involved, a person familiar with the talks said. A vote on liquidating the project, proposed by holding company Al Sawadi Investment & Tourism LLC, has been put on hold, the person said.

“If it’s not handled appropriately and transparently, it could tarnish Oman’s image as an investment destination at a time when Oman is trying to diversify and develop its tourism sector,” said John Sfakianakis, Riyadh-based chief economist at Banque Saudi Fransi.