Stranded Oman project picked up by Abu Dhabi

An Abu Dhabi-backed fund is expected to announce as early as today it has bought out the senior debt in a stalled Omani real estate project in a landmark regional distressed real estate deal.

People close to the matter say Essdar Capital has concluded a third-party tender offer on class A debt held by Blue City, which it says gives effective control of the assets and future direction of the tourism and residential project. The tender has been carried out with the consent of Blue City management.

The transaction marks a significant regional distressed real estate transaction widely expected in the Middle East where dozens of projects remain stranded after the property market corrected. It may also finally prompt some movement at the much-troubled Blue City development.