One mile of Ocean Front, One Incredible Real Estate Development
Multi-Billion Dollar Agreement Signed With Oman
Message: April 1st 10-K Update
In the SEC filings for today, we have an update on our favorite saga:
A new Under-Secretary of Tourism - Her Excellency Maitha Al Mahrouqi - was appointed in early 2012. In Oman, an Under-Secretary is the No. 2 executive in any Ministry, second only to the Minister.
A new Minister of Tourism - His Excellency Ahmed Al-Mahrizi - was appointed on March 1, 2012.
The Minister of Tourism assigned specific responsibility for the Omagine Project to the Under-Secretary and during 2012 a thorough review of the project was undertaken by Her Excellency Maitha Al Mahrouqi and her staff.
Pursuant to the DA as presently agreed, Omagine LLC is obligated, within 12 months after signing the DA, to transform its corporate structure (the “Transformation”) from a limited liability company into a joint-stock company ( “Omagine SAOC”).
Over the past many months discussions have been held among the Under-Secretary, her staff and various members of Omagine LLC management and its lawyers regarding the timing of the Transformation, particularly as to whether or not it should occur before signing the DA. The Office of Royal Court Affairs ("RCA"), which is a 25% shareholder of Omagine LLC, has justifiably objected to doing the Transformation prior to signing the DA.
During January 2013, Mr. Suleiman Al-Yahyai, Investment Adviser at RCA, had several conversations with the Minister of Tourism regarding the Omagine Project and the timing of the Transformation. On January 13, 2013, the Minister of Tourism informed Mr. Al-Yahyai that he had discussed the matter with the Under-Secretary, H.E. Maitha, and had instructed her to meet with the Omagine LLC shareholders as soon as possible and to resolve all matters relevant to the DA, including the timing of the Transformation. His Excellency the Minister further confirmed to RCA that MOT regarded the Omagine Project very highly and that he was anxious to see its early implementation.
On February 2, 2013, Mr. Al-Yahyai met with Her Excellency Maitha Al Mahrouqi and her staff to discuss the Transformation issue as well as the delays encountered in signing the DA. Mr. Al-Yahyai has advised us that H.E. Maitha and her staff informed him at the meeting that the Transformation was required before signing the DA because this was a requirement of the Ministry of Finance (“MOF”). Shortly after the meeting we were informed by MOF that, in fact, this is not true.
Mr. Al-Yahyai further advised us that Her Excellency promised to arrange a meeting within one week (by February 9, 2013) with herself and her staff and Mr. Al-Yahyai and Omagine LLC management and their attorneys, to discuss and finalize all matters relevant to the DA. CCC (which is a shareholder in Omagine LLC) had arranged a meeting with MOT for March 16, 2013 but that meeting was abruptly canceled by MOT on March 15 th .
As of the date of this report (8 weeks after Mr. Al-Yahyai’s February 2 nd meeting with H.E. Maitha Al Mahrouqi), and despite our recent repeated – and to date, so far unsuccessful - attempts to be in touch with MOT, we are still awaiting a communication from the Under-Secretary setting the date for the aforementioned meeting.
Our informal communications with other business people in Oman indicate very clearly that they are all experiencing similar difficulties with MOT and with several other Government ministries and governmental authorities. Our efforts to resolve this trivial Transformation issue are ongoing and intensifying and we are presently in contact with several other Ministers and with the office of Royal Court Affairs (which is a 25% shareholder of Omagine LLC) in an effort to conclude this matter and get on with the development of the Omagine Project.
On March 31, 2013, we were informed by Mr. Al-Yahyai that he had met that day with H.E. Nasser Al-Kindy, the Minister of Royal Court Affairs, and had fully briefed His Excellency regarding the inactivity at MOT regarding the Omagine Project. His Excellency Al-Kindy was very surprised by this news since he had been informed two months earlier by H.E. Al-Mahrizi that all was fine with the Omagine Project. Mr. Al-Yahyai informed us that the Minister of RCA (H.E. Al-Kindy) will meet with or call the Minister of Tourism (H.E. Al-Mahrizi) to inform him that unless the Omagine DA is settled soon, he (H.E. Al-Kindy) will be obliged to raise the matter to the “highest authority” in the Sultanate.
It is management’s expectation that if the Transformation is done after we sign the DA, then the DA will probably be signed in the very near future. If however we are required to do the Transformation before signing the DA, then the legal and bureaucratic formalities (which are routine but required) will cause the DA signing to be delayed for several months subsequent to the time this Transformation issue is resolved with MOT. The timing of the Transformation remains unresolved as of the date hereof.
Past experience indicates that caution should be exercised in making any assumptions until the DA is actually signed by the parties. We caution investors that we cannot give any assurance whatsoever that the DA will be signed by the parties until it is actually signed by them.
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I can imagine that we'll know in the next month or two whats going to happen with the transformation. Its not good news, but this isn't negative news. Its more of the same.
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