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Istithmar loses millions

Istithmar loses millions

Istithmar World, part of Dubai World, lost rights to the W Union Square New York hotel in a foreclosure auction in the New York.

December 9, 2009 12:40 by



Dubai World’s saga continues to make headlines worldwide as Istithmar World, the conglomerate’s investment arm, lost rights to the W Union Square New York hotel in a foreclosure auction on Tuesday, reports The Wall Street Journal. The 270-room luxury hotel was put up for auction after Istithmar defaulted on a $117 million in junior debt in October.

In September, the investment firm’s first $115 million mortgage was shifted to a company that handles potentially bad loans.

The hotel, which Istithmar bought for $282 million for a 90 percent stake in October 2006, and later paid another $4 million in June 2009 for the remaining 10 percent, was sold to LEM Mezzanine, a private equity firm, for $2 million.

Initial biddings for the hotel were as low as $100,000.

Istithmar invested over $27 billion in companies worldwide, paying premium prices for stakes in iconic corporations. The investment arm allegedly paid only $2.5 billion in cash for it investments, and used credit secured from banks globally to fund most of its spending spree, Bloomberg reported in September.



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1 Comment

  1. Deepak Lal on December 12, 2009 3:56 pm

    Deepak Lal on December 7th, 2009 at 10:13 am:

    Barclays Bank Dubai, UAE has ended with an exposure of USD 500Million to various entities of Dubai World. When the loans were granted, the risk was not properly assessed, necessary due diligence was not undertaken but rather was approved due to Barclays Dubai management’s connections at high places.

     

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