Tuesday, Sep 28, 2010
DUBAI (Zawya Dow Jones)--Egypt's real-estate developer Talaat Mostafa Group, or TMG, said a new land contract with the government will maintain the same conditions as the old contract and that a government share of 9.9 billion Egyptian Pounds ($1.74 billion) will not represent a financial burden on the group.
Egypt's cabinet agreed late Sunday that TMG should be allowed to keep the land of a massive real-estate development outside Cairo that was at the heart of a dispute.
The cabinet decided to invalidate TMG's original Madinaty development contract and reallocate the land to TMG's operating company, Arab Co. for Projects and Urban Development, under a new contract.
"The new contract between NUCA [New Urban Community Authority] and Arab Company for Projects and Urban Development shall be drawn with the same terms and conditions stipulated in the previous contract and with no contradiction to the rulings of the administrative court and Supreme Administrative Court of the state council," said TMG in an e-mailed statement late Monday.
On Sept. 14, an Egyptian court ruled that the land for TMG's flagship Madinaty development in new Cairo was given to the group by the Ministry of Housing through the ministry's New Urban Community Authority, or NUCA, and not allocated through a competitive bidding process.
The cabinet also said on Sunday the value of the government's share will be "at least" EGP9.97 billion under the new contract.
The reference to the EGP9.9 billion does not imply any additional financial burden on TMG, said the company in Monday's statement.
"This amount reflects the sales value of the in-kind units which are to be delivered over the lifetime of the project. It is important to mention here that the sales value of these units over the coming ten years is estimated to be at least EGP15 billion at current market prices," TMG added.
TMG shares are down 1.4% at EGP6.95 in a broadly negative market. The company's shares fell as low as EGP6.23 on Sept. 16.
-By Shereen El Gazzar, Dow Jones Newswires; +2 012 4298286; Shereen.elgazzar@dowjones.com
Copyright (c) 2010 Dow Jones & Co.
(END) Dow Jones Newswires
28-09-10 0737GMT
