Survey: Stalled projects. Investment opportunities in search of solutions

Restructuring, legal scrutiny and liquidity injections are needed to turn troubled projects into profitable assets, experts say
Distressed Projects - Ejar Platform

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Poll: Abdullah Alsaleh: In light of economic challenges and market fluctuations, Distressed Projects stand out as one of the promising investment opportunities that may carry great returns for investors who are able to read them intelligently. Studying these opportunities and exploring their prospects may open the door to successful projects that revitalize assets that have lost their luster and turn them into tributaries of growth and profit.

MFD1SA: Dealing professionally and intelligently to seize opportunities and overcome challenges

Mohammed Al-Seelis, CEO of Watad, explained that project failures are caused by several key factors, most notably the absence of specialized management competencies and weak follow-up mechanisms, which leads to a loss of viability. He pointed out that poor preliminary studies, inaccurate cost estimates, and fluctuating funding sources contribute significantly to this issue, adding that market fluctuations, sudden regulatory changes, and disputes between partners or financiers can disrupt strategic decisions and increase the likelihood of failure.

Seelis added that market fluctuations, sudden regulatory changes, and disputes between partners or financiers can disrupt strategic decisions and increase the likelihood of stalling. <Investing in distressed projects is a smart and highly profitable option if handled with awareness and professionalism. Investors can acquire assets and projects at below-cost values, providing a relatively low-risk starting point. <He explained that injecting new liquidity and restructuring these projects gives them the potential to turn into profitable and competitive entities, and this type of investment contributes to the diversification of investment portfolios and creates added economic value by reactivating stalled assets and creating new job opportunities. <According to Al-Salis, the success of investing in troubled projects depends on several motivating factors, including: Clarity of the project's investment vision, the existence of practical rescue plans, and transparency in the presentation of financial and technical data. The entry of experienced investors or strategic partnerships with them is one of the most important success factors.

In conclusion, he noted that the success of investing in distressed projects depends on several catalysts. <In conclusion, Al-Salis pointed out that attempts to rescue stalled projects face complex challenges, such as: Restoring the confidence of customers and financiers, high restructuring costs, legal complications resulting from disputes and accumulated debts, in addition to weak management competencies and difficulty in adapting to rapid changes in the markets.

In conclusion, he pointed out that attempts to rescue stalled projects face complex challenges, such as.

Abdulhadi Al Muhaya: Financial reorganization provides solutions to protect investments

<According to lawyer and legal consultant, Abdulhadi Al Muhaya, project failures are not due to a single cause, but are the result of the interplay of multiple factors. These factors include:

<Inadequate preliminary studies that may overlook potential legal and financial risks. <Weak governance as some companies lack oversight and accountability mechanisms.

Contractual disputes with contractors or suppliers, which can lead to prolonged delays in implementation. <Unstable financing resulting from poor financial management or market volatility. <Delays in regulatory procedures or lack of clarity from some of the relevant authorities. <Mohaya emphasized that stalled projects represent a promising investment opportunity if they are handled properly. As the cost of reviving them may be less than the cost of starting from scratch, and to achieve this, the following must be done:

<A thorough legal examination of all obligations and disputes related to the project. <A financial and organizational restructuring that considers the interest of all parties. <A strategic partner capable of assuming the risks and restoring confidence to investors. <He also pointed out that the feasibility of investment is high if the project is approached with a reformist mindset rather than an adventurous one. Al-Muhaya stated that there are a number of incentives to invest in troubled projects, including:

A well-developed legal framework such as the bankruptcy and financial reorganization system, which provides practical solutions to protect investments.

Government support and regulation. <Government and regulatory support to enhance the sustainability of real estate projects. <Access to competitively priced assets or projects compared to their market value after restart. <Availability of innovative financing tools through banks or investment funds. <Realizing quick returns when the project is completed and put on the market. Al Muhaya said that there are a number of challenges facing the process of rescuing stalled projects, including:

Legal complexities Legal complexities associated with disputes and accumulated debts.

Lack of transparency in some cases. <Lack of transparency in some cases, as there is insufficient disclosure of the financial and administrative situation. <High cost of rescue compared to the expected return. <Multiple parties and conflicts of interest. <The longer the default lasts, the more difficult it will be to get the project back on track.

Abdullah Al-Qarni @abdullahali9999: The importance of having clear financing mechanisms from banks

. <Abdullah Al-Qarni of Wasl Real Estate Company stated that projects falter due to several main reasons, primarily poor preliminary studies and inaccurate feasibility studies, poor management or lack of technical and financial expertise among developers or contractors. The reasons also include changing prices of building materials and operational costs, lack of financing or interruption of financial flows during implementation. Delays in issuing licenses or facing legal and regulatory issues also contribute significantly to the failure of projects.

If properly studied, stalled projects represent promising investment opportunities. They can be acquired at below-market value, allowing a higher profit margin upon completion, and investing in them shortens the development cycle compared to starting from scratch, especially if a large part of the project has already been completed.

Al Qarni believes that stalled projects represent promising investment opportunities if re-studied properly. <Speaking about the incentives to invest in these projects, Al Qarni emphasized the importance of clear financing mechanisms from banks and real estate development funds. He emphasized the role of governmental and regulatory support through facilities and exemptions, and the importance of transparency in disclosing the status of the project. He added that having a partner specialized in development or technology helps in restructuring, and that ensuring there is demand for the final product is a key factor for success. <Despite the opportunities, Al-Qarni explained that there are significant challenges facing attempts to rescue stalled projects, such as the difficulty of addressing legal aspects related to the rights of previous owners, and the varying quality of previously executed works. Challenges also include insufficient liquidity, lack of confidence from buyers or investors, and the possibility that market needs may have changed since the first project was launched.