Now do the Cha-cha-cha
More dance steps on display as embattled developer Nakheel has another good news/bad news type-of-day. The music plays on…
January 9, 2011 2:23 by Samuel Potter
Life at Nakheel HQ must be a strange thing. One minute, they’re handing out the tissues as yet more bad news overtakes the company, and the next, they’re breaking out the cigars as they turn another corner. Not so bad, you may say, but Nakheel seems to have developed the ability to attract both bad and good news on the same day – a weird sort of Karma that must be keeping most members of the senior management team on their toes.
Just the other day we wrote about Nakheel’s ongoing dance, the last signature move involving two steps forward and one step back. This weekend it embarked on the next phase of this particular routine, a neat little one-two move, forwards and back.
The ‘forwards’ move? The company has won its first victory at the Dubai World tribunal. It wasn’t even the canteen table-football tournament, either – it was a proper court victory and everything. Gulf News reports that Justice Sir John Chadwick, member of the Dubai World Tribunal, dismissed an attempt by Gammon & Billimoria, an Indian contractor, to stop the developer’s demand last month for repayment of AED32 million in advances. Okay so it’s not much cash (obviously to Kipp it is an awful lot of cash, but in the wider, Nakheel debt sense, it’s not much cash), but as the paper points out, Nakheel has lost several hearings so far, including a couple where it was attempting to recover funds from contractors. So this is good news, and could spur it on to follow up with other contractors. The Gulf News didn’t carry a Nakheel quote, but we imagine a spokesperson would have said: “Booyah!”
Unfortunately, as this little win was playing out, news broke that the Auchan supermarket in Kipp’s favourite dragon-shaped structure (and the largest in the world, incidentally), the Dragon Mart, has shut down. Reuters reported that “The poor economic climate has forced French retailer Auchan and local partner RetailCorp to close the Auchan hypermarket in the shopping mall of DragonMart in Dubai.” Why does this bother Nakheel? Because Auchan signed a 2008 deal with Nakheel to create a joint venture called Hypercorp LLC that would operate across the Gulf.
Poor old Nakheel. We’ll go ahead and assume Hypercorp is on hold for a little bit, shall we? At the local level it’s bad news for International City residents and the Dragon too, of course. And it can’t have been pleasant for Auchan, the world’s 11th-largest food retailer, with 1,278 stores in 13 countries. Apparently, the company is controlled by the Mulliez family, “one of the wealthiest and most secretive in France” according to Reuters. Oooh, exciting!