News

Business as usual at V&A as co-owner enters deep water

November 27, 2009 Edition 1

Aziz Hartley and Sapa

THE provincial government's investment arm, Wesgro, is keeping a close watch on developments at Dubai World Africa, co-owner of the V&A Waterfront, as the company is in financial trouble.

Dubai World Africa, through its investment company, Isithmar, has a 37.5 percent stake in the Waterfront. The popular tourist attraction's other major stakeholder is London and Regional, which has a similar stake as Dubai World, while the remainder is shared among BEE groups.

Earlier this week, Dubai World, the state-owned real estate and ports giant, asked its creditors if it could delay payment on its $59 billion in debt until at least May 30. It had been due to repay $3.5bn next month.

Wesgro chief executive Angelo Manzoni said yesterday rumours of Isithmar being liquidated surfaced about two months ago.

"On the back of that, we engaged Dubai World Africa and spoke to its chief executive, Mohamed Saleh," Manzoni said.

"We were concerned about the significant investment they procured in the V&A Waterfront. We wanted to determine what their intention was, or what the risks were."

Isithmar acknowledged that the global financial crisis had affected Dubai World Africa, but said the Waterfront remained a key asset for the company.

"The V&A Waterfront is in no danger, according to their feedback at the time," Manzoni said.

"With the new information, we will now have to review, but we can comment further only after an analysis. We will be watching this very closely and will be following up."

The Waterfront's public relations officer, Chantel Kidd, said Dubai World Africa's financial situation was a matter for its shareholders to deal with and had not affected the centre's daily operations.

"(Dubai World Africa) are one of our shareholders, but the V&A Waterfront is not best-placed to respond to this matter.

"It has not impacted on our day-to-day running of the property. We do not have any concerns at all."

Waterfront chief executive David Green was not available, but he would not comment because the problem was for the shareholders to sort out, Green's secretary said.

In 2006, Transnet sold the Waterfront to a South African-registered but majority foreign-owned company, Lexshell, for about R7bn.

The BEE shareholders included Cape Town businessman Hassen Adams. Their share of the deal was funded by Dubai and London-based investors and they were given five years to repay the loan.

Dubai World has been particularly hard-hit by the global credit crunch and the collapse in the housing market.

aziz.hartley@inl.co.za