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Wed 30 Sep 2009 02:54 PM

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Khoie Properties denies insolvency rumours

$800m La Hoya Bay developer commits to mega project, explains funding decisions.

Struggling La Hoya Bay developer Khoie Properties on Wednesday denied it was insolvent and said it would build the $800m waterfront project.

Earlier in the month, Rakeen, the government-owned real estate company in Ras Al Khaimah, was named judicial custodian of the developer after reports Khoie had become insolvent and defaulted on land payments.

“Khoie Properties, a member of the Khoie Group of Companies, has denied allegations of insolvency, and instead reiterated its control over AED1bn ($272m) assets in land and AED700m receivables on account of its ownership of the AED5bn La Hoya Bay project in Ras Al Khaimah,” the company said in an emailed statement on Wednesday. “In light of recent reports highlighting the financial disarray within Khoie Properties, company officials are positive of completing construction of the project, given that piling and foundation works have been completed for several buildings,“ the developer added.

In addition, Khoie provided a detailed breakdown of what the AED288m so far collected from investors has been spent on.

In the last three years the company said it has allocated AED81m towards construction, architecture, design and engineering costs and paid the RAK (Ras Al Khaimah) government AED72m for land purchases.

Some AED61m has covered global real estate brokers’ fees, while AED56m has been spent on staff salaries, advertising, promotions and administration expenses.

Finally, AED18m was invested in the Ras Al-Khaimah American School, the first American international expatriate school in the northern emirates.

Shedding light on its land payment default, the developer explained it ran into trouble in December last year when it failed to pay a AED57m installment to the Ras Al Khaimah Investment Authority (RAKIA).

“With the exception of the outstanding land payments, the developer maintains a healthy, asset-rich balance sheet with zero debt to banks,” Khoie added.

Rakeen is the master developer of Ras Al Khaimah's Al Marjan Island, the site of the planned development.Around 800 investors, out of which half were from the UK, had already made a 30 percent down payment to Khoie.

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ABJ 10 years ago

Its high time that the developer calls for a investor meet and tell us what he plans to do as since from the start of this year the investors keep getting different clarifications from the developer. If he is not insolvent then start building and give us our over delayed apartments . Why is the developer asking for accelerated payments if he is not insolvent as the value of the apartment/investment was fixed upon taking into consideration that the developer would charge 30 % as down payment and the 70 % would be on possession or on a 5 year NON STATUS payment plan at an interest rate as mentioned in the contract. The developer should mutually come to an amicable solution with the investors if he needs their money in ADVANCE to build.

Mr Khan 10 years ago

Not sure what planet these Khoie representatives are on but RAKEEN have taken charge of La Hoya Bay sure and simple. After the banks pulled the plug on their non status finance RAKEEN made arrangements with the Bank of Baroda not Khoie. Their customer service has been dreadful and its best left to the government at least customers have security.

Media Republics 10 years ago

Frank Khoie is doing an Eye Wash... He says 61 million on salaries, admin, advertising blah blah... We have been to that warehouse office many times and we know this is all misleading!! Also they have defaulted paying us and we have put a lawsuit on them for half a million.

Anwar 10 years ago

Does anyone have any info regarding Bab Al Badr on Al Mirjan Island Because I have invested in the the project but can't seen to get any info about the project.Bought it fro emyproperty and it looks like they have close shop and have run with our money. Please any info would help.

Ash Merry 10 years ago

We have set up a La Hoya Bay Investors Group and are keen to make contact with fellow investors. We too now want a meeting with Rakeen and Khoie Properties to find a workable solution and get the project restarted. http://www.lahoyabay-investors-group.com Please get in touch