Thursday, Nov 24, 2011
(This item was originally published Wednesday.)
CAIRO (Zawya Dow Jones)--Egypt's court has ruled that Talaat Moustafa Group Holding's Madinaty project is valid, putting an end to a long-running legal battle over the land which was purchased directly from the state instead of at a public auction.
The country's Administrative Court ruled that the Madinaty scheme is "valid and correct and in compliance with the Egyptian laws", TMG's statement said a statement published on the Egyptian developer's website.
But TMG said it would still contest a part of the ruling that states that unutilised parts of the land should be revalued.
The company said the utilized land area in the form of developments, utilities and infrastructure exceeds 75% of the total project's land area, but the "area that would be revalued, if need be, would not exceed 25% of the total project's land area".
TMG added that "given the prevailing market conditions", the company doesn't expect the re-evaluation to be materially different from the valuation conducted in November 2010, when the Madinaty contract was first signed.
Investment bank Beltone Financial in a note Wednesday said the ruling provides a much-needed breather to not only TMG, but also to the real estate sector sentiment. "The Madinaty project is one of the biggest real estate projects in Egypt, and will be the major earnings driver for the company in the coming years," said Beltone, noting however that the court's recommendation to revalue the unutilised land came as a surprise.
TMG shares are trading +1.3% at EGP3.21 in an overall negative market Wednesday.
-By Farah Halime; Contributing to Dow Jones Newswires;
Fhalime@gmail.com
Copyright (c) 2011 Dow Jones & Co.
(END) Dow Jones Newswires
24-11-11 0347GMT
