Burj Dubai builder faces UK crisis
The firm charged with the construction of the world’s tallest building, Burj Dubai, has been forced to sell many of its assets after suffering terrible losses.
The firm charged with the construction of the world’s tallest building, Burj Dubai, has been forced to sell many of its assets after suffering terrible losses. Australian firm Multiplex was forced into putting several of its key interests up for sale after experiencing losses of almost US$200 million building the new Wembley Stadium in London.
A number of Multiplex ventures in the UK were last week reported to have been acquired by the billionaire Reuben brothers, in a deal worth over US$175 million. The brothers had been partners alongside Multiplex, but The Sunday Times claimed that they had now taken full control of a series of property projects and investments. The move comes weeks after the construction firm warned investors that it was in consultation with banks in a bid to reduce its debts. The company posted half-year losses of around US$87 million, amid desperate attempts to reduce levels of borrowing.
The US$1.3 billion new national stadium has been dogged by a series of problems and delays since construction began in June 2002. The firm last week finally acknowledged that the project would not be completed in time to host the FA Cup Final in May.
At one point, events even took a sinister twist when the company received blackmail threats regarding its construction workers’ safety. A letter sent to Multiplex’s Sydney headquarters claimed that, unless the firm paid a ‘ransom’ of AU$50 million (US$37 million), a sniper would target employees on site. Around 1,000 personnel declined to attend work when news of the threats was made public.
Burj Dubai is in the hands of NASA Multiplex, a Dubai-based subsidiary of the Australian firm that operates as a UAE-Australian joint venture. It is one of the largest contractors in the UAE, with 16 projects currently underway, and almost 500 staff. The firm was recently awarded a US$290 million contract to design and build Index, a 328-metre tower with 86 floors. Located in the Dubai International Finance Centre complex, the mixed-use project – based on an original design concept by Foster and Partners of London - should take three years to build.
“We have a very strong business in Dubai and we remain very committed to that market,” said a Multiplex spokesman. “Our business in the UAE is all in construction contracts, so in terms of assets I don’t know what we could be expected to sell.”