UPDATE 1-UAE property developer files for bankrupty
* Developer in emirate Umm al-Quwain files for bankruptcy
* Property project was worth $3 bln-FT
(Updates with confirmation of liquidation)
DUBAI, Nov 24 (Reuters) - Al Murjan Real Estate, developer of a $3 billion housing project in the United Arab Emirates, has filed for bankruptcy after running into financial difficulties, according to a letter sent by liquidators to property buyers.
The developer filed for insolvency in the emirate of Sharjah and two liquidators have been appointed, the FT reported earlier on Wednesday, citing lawyers saying that it was the first court-mandated bankruptcy of a distressed property project in the emirates.
Property buyers would likely find it difficult to recover downpayments they made on homes in the 8,000 home White Bay development, which Al Murjan had started to build in another emirate, Umm al-Quwain, the newspaper said.
As property prices plummeted some 60 percent since peaking in 2008, half of buyers had not maintained payments, the letter, seen by Reuters, said.
"This has affected the company's capability to obtain finance from banks despite the company, in light of the global economic crisis, has got the approval of the Mashreq Islamic Bank to finance the buyers," the letter said, referring to Al Murjan Real Estate.
The project was a joint venture between Sheikh Abdullah bin Rashid al-Mualla, the deputy ruler of Umm al-Quwain, and Al Khalijia Investments. (Reporting by Reed Stevenson; Editing by Jon Loades-Carter and Erica Billingham)
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