We are delighted to inform Wind Towers’ esteemed investors of the recent development activities regarding Wind Tower One and Wind Tower Two projects.

In this text, we refer to major activities and events on a timeline basis and will try to focus on recent actions that are more sensitive and promising.

A.      Abstract

·         The main issue of the project is cash flow problem: little amount in the projects’ escrow accounts and huge amount (about AED 35,000,000.00) overdue installments by unit-owners. So, the only solution is injecting money into the projects.

·         Since 2009, we have been trying to solve this problem through

Ø  Convincing defaulters to pay overdue installments

Ø  Preparing new payment plan linked to physical construction progress

Ø  Selling stock (available) units of the project

Ø  Bringing in new investors/financers and

Ø  Finding a joint-venture contractor to be paid from project inventory

Ø  Self-investment

We believe before solving this issue and providing smooth cash flow, any other activities like determining new roles and engaging new parties are useless.

·         We had numerous negotiations with different parties which some of them were introduced to us by unit-owners. In 2011, we found some interested parties who were very serious, rich, and committed enough to complete the projects. We have been communicating and negotiation with them in parallel during previous months.

·         In June 2011, DMCCA showed interest in taking over the projects. We requested for official proposal. They sent their initial terms and conditions after 2.5 months which we found it unreasonable and problematic for the projects because it may cause at least 12 months delay so we rejected their terms and conditions.

·         After responding to DMCCA, we restarted our negotiations with other interested parties and hopefully we are proceeding to next stage with three of them to choose one partner and finalize the deal.

·         We sincerely demanded all esteemed investors to extend their support towards these projects and prevent any parties/person from acting against projects’ interests and performing any destructive and detrimental behavior that may destroy previous efforts conducted through Wind Steering Committee and mutual collaborations between developers and unit-purchasers.

B.      Development activities/timeline

v July 2010

July 4: we completed casting 17^th floor in Wind I and 15^th floor in Wind II. We submitted our Action Plans to RERA and DMCCA for their review and approval. Afterwards, we continued doing internal work like block work, MEP work… inside the buildings.

v October 2010

October 10: “Wind Towers summarized report”, including main causes of projects’ delays and interruptions, financial status, timeline and milestone, revised action plans… were submitted to RERA and DMCCA on 10^th October and requested a meeting with them to discuss about the projects.

v November 2010

November 8: we had a meeting with Eng. Marwan, CEO of RERA and negotiated about forming a committee including all concerned parties.

November 14: the first meeting of “Wind Steering Committee” (including RERA, DMCCA, developer, investors’ representatives), headed by CEO of RERA was held.

v December 2010

December 16: in the second committee’s meeting, DMCCA was nominated as Project Manager to manage construction work either directly or through their representative. RERA was supposed to provide DMCCA with OQOOD information and Wind Developer should deliver all legal, architectural, and engineering information and documents.

v January 2011

January 10 and 17: two meetings were held between DMCCA and developer and all requested documents (permissions, architectural designs and approvals, contractors and suppliers agreements…) were delivered to DMCCA.

January 25: Steering Committee decided to have their meetings every 6-week.

v March and April 2011

We sent five requests for Committee’s meeting or a mutual meeting to DMCCA which all remained unreplied.

April 19: finally in response to the sixth request, DMCCA suddenly and unilaterally withdrew itself from the committee and stated that “DMCC is no longer willing to continue to work with Wind and instead look forward to Wind completing their full obligations according to our SPA”. We asked for more clarification but we are still unaware of the reasons of this action.

v June 2011

One of Wind investors’ representatives (Mr. Joe) had a meeting with Mr. Matthew Lomax, DMCCA’s Director of Property. In the meeting Mr. Matthew had stated that DMCCA is ready to take over these projects and complete them if current developer is completely out. In fact DMCCA is not interested to work with current developer.

June 27: We met Mr. Marwan and explained about DMCCA’s statement and said we have no objection if DMCCA is serious but we prefer to negotiate and deal with DMCCA through Wind Steering Committee. He Accepted.

v July 2011

July 4: we sent our official “Request for DMCCA’s proposal for development of Wind Towers” to RERA and copied to all concerned parties including DMCCA. Giving the highest priority to DMCCA, we hold other negotiations with interested parties and waited for DMCCA’s proposal. During July and August, all our direct follow-up through email and telephone and indirect follow-up via RERA’s office failed.

v September 2011

September 5: in a follow-up email, we stated that we will not wait more than 15 days for DMCCA to send their proposal and any submitted proposal after this period will be ignored.

September 19: Finally, DMCC responded and stated that their letter “is only intended to serve as a basis for future discussion and is not, and should not be interpreted as, a contract or an offer” and included the following terms and conditions:

·      Wind developer would retain all liabilities in connection with the Projects, unit-purchasers and construction parties

·      DMCCA shall be nominated as development manager

·      DMCCA needs at least six (6) months to check the feasibility of projects

·      DMCCA will not be responsible for any damage or loss or delay (in the past and future)

·      DMCCA can quit its role in the projects anytime at its sole discretion

September 29: we found DMCCA’s letter unreasonable and problematic for the projects because it may cause at least 12 months delay and at the end DMCCA may quit without taking any responsibility. So, we replied that their initial conditions were unacceptable and stated that:

1.    DMCCA has proposed to take “Development Management” role in the projects while:

·         The main issue of these projects is financial problem not lack of development or project manager.

·         DMCCA was nominated as “project manager” on 16^th December 2010 by Committee and all requested information/documents were delivered to them in January 2011 by developer. DMCCA withdrew itself from the committee after four months without any positive action as project manager. Indeed, DMCCA has had the same role (project/development manager) for the last 10 months but has never fulfilled any constructive activities in this regard.

2.    DMCCA has requested six month study period to determine financial feasibility of the projects which is unreasonable because:

·         Projects’ financial and engineering audits done by RERA-accredited auditors are available and are the best source for above matter.

·         “Wind Projects Summarized Report” dated October 10, 2010 which was submitted to RERA and DMCCA include all required information.

·         OQOOD System includes all financial information as per the SPAs and received amounts from purchasers and can be accessed through Dubai Land Dept. or RERA.

·         We have developed a database including all real information of the projects, units, and unit owners… that is able to provide the most updated financial reports in seconds.

3.    Though Wind projects’ developers retain liable and responsible for projects’ financial and engineering matters, DMCCA’s request to be fully indemnified for any kind of loss or damage during its performance as development manager is totally unacceptable. DMCCA should take responsibility for direct and indirect delays or loss/damages caused by its activities.

4.    At the end, we sincerely demanded RERA and DMCCA (specifically) to extend their support towards these projects and prevent any parties/person from acting against projects’ interests and performing any destructive and detrimental behavior that may destroy previous efforts conducted through Wind Steering Committee and mutual negotiations and collaborations between developers and unit-purchasers that have been very encouraging.

v October 2011

After responding to DMCCA’s disappointing letter, we reactivated and accelerated our negotiations with other interested parties and now there are three competitors that have accepted all terms and conditions and they are very serious, rich, committed to invest and finish the projects. We are doing our final investigation about their financial background and reputation to select one of them, finalize the deal, and do required arrangements with authorities. They are also checking about the financial and legal matters of projects and for the same reason may refer to DMCCA, RERA, or Land Department.

C.       Conclusion

We strongly believe that DMCCA’s pre-proposal letter was unsatisfactory and non-profitable for these projects and unacceptable to anybody who is really interested in a serious and short-term positive action.

We trust that esteemed investors can play a vital role in passing this very critical stage and solving current problems. Therefore, we expect you to extend your support towards your projects and avoid/prevent any unaligned actions with projects’ interest. Mutual cooperation and effective collaboration between developer and unit-owners, unifying all efforts on a unique goal, transparent and continuous communication based on correct information… is the main key for resolving the issues.

As developer, we have invested a lot of our money, time and energy in these projects and are committed and determined to fulfill our obligations and hand-over the units to purchasers as soon as possible. So, even one day delay is unfavorable for us. We are seeking for reliable and guaranteed solutions instead of fake and illusionary ways that may make more problems and loss (out of the flying pan into the fire).

Anyhow, as promised before we would like to inform all investors of main decisions and activities regarding these towers. But on the other hand, all of us have to be conservative in dispatching inaccurate or unrealistic information and avoid any intentional or unconscious destructive and harmful behavior.

We renew our thanks and appreciation for your patience and support.

For and on behalf of
“Wind One Inc. Limited” and “Wind Two Inc. Limited” companies