Offering and listing on the London Stock Exchange planned for May 2008
Palm Hills Developments S.A.E. ("PHD" or the "Company"), a leading real estate developer in the Egyptian market, today announces its intention to conduct a global offering ("the Global Offering") of ordinary shares ("Shares") and global depositary receipts ("GDRs") and to apply for admission of the Shares to trading on the Cairo and Alexandria Stock Exchange (the "CASE") and for the admission of the GDRs to the Official List of the U.K. Financial Services Authority and to trading on the London Stock Exchange plc ("LSE"). The Global Offering is expected to close in May 2008.
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About the Company
PHD is a leading real estate developer in the Egyptian market, developing primarily high-end residential real estate and resort projects. The origins of the Company date back to 1997 through the operations of its sister company Al Ethadia. PHD's controlling shareholder is El Mansour and El Maghraby for Investment & Development S.A.E. ("MMID") which owns approximately 66 per cent. of the Company. MMID is an Egyptian joint stock company established in 1996 by the El Mansour Group and the El Maghraby Group.
The market value of PHD's properties as at 1 March 2008 has been independently valued by CB Richard Ellis (CBRE) at LE 19.5 billion (US$3.5 billion), prior to adjustments for tax, minority interests and land repayment obligations. In the year ended 31 December 2007, the Company generated revenues of LE 535.0 million (US$96.7 million) and net profits LE 179.8 million (US$32.5 million).
The Company has acquired large parcels of land in strategic locations throughout Egypt and has one of the largest land banks held by any developer operating in the Egyptian market consisting of over 37.7 million square metres of land. Of the Company's 22 projects, five are under construction and a further 12 have already been master planned.
Development land locations include: Cairo's West axis in 6th of October City; Cairo's East axis in New Cairo City; the North Coast on the Mediterranean Sea; the City of Alexandria; and the Red Sea Coast in different locations.
PHD is currently constructing or designing seven residential projects, covering approximately 12.0 million square metres. These projects feature a variety of residential units and have been designed to meet demand in the Egyptian market for high-quality, prestigious housing of varying sizes and styles. These projects are designed as "gated communities" that include the requisite supporting infrastructure, landscaping, common areas and security services.
A further five residential resort projects, covering approximately 9.3 million square metres, are currently being constructed or designed by PHD. These projects are designed to respond to increasing demand, both from Egyptians and from abroad, for high-quality second homes and resort accommodation. Amongst these projects, Hacienda Bay comprises over 2.3 million square metres of land located on Egypt's North Coast and, upon completion, is expected to feature a variety of residential units, five-star hotels, a health spa and a private 18-hole golf course, as well as numerous dining and entertainment facilities. These projects also include properties on the Egyptian coast of the Red Sea that Palm Hills intends to develop as residential resort projects.
The Company is also constructing or designing five mixed-use projects covering approximately 0.9 million square metres. These projects will include a mixture of residential and commercial properties. For example, "The Village", which is situated near to the American University campus in New Cairo, is designed to include quality apartments suitable for students, young professionals and young families, as well as a large retail mall designed to attract residents of the development, students from the nearby campus and others in the same age group.
PHD intends to use the net proceeds received by it from the Global Offering to fund existing and future development projects and to expand its land bank both in Egypt and abroad.
The Global Offering
The Global Offering consists of an offering to institutions internationally and in Egypt. EFG Hermes and Goldman Sachs International have been appointed Joint Global Coordinators and Joint Bookrunners of the Global Offering. A separate retail offering will be conducted in Egypt. This announcement does not relate to such Egyptian retail offering.
Further details and announcements of the Global Offering including regarding timing and sizing will follow in due course.
Comment
Commenting on today's announcement, Yasseen Mansour, Chairman and Chief Executive Officer of the Company said:"Palm Hills is one of Egypt's leading real estate developers and is well positioned to exploit the strong economic and demographic fundamentals in Egypt. The Company has an excellent reputation and a brand associated with quality and reliability. The Global Offering will enable us to expand this reputation and provide capital to pursue further strategic land acquisition opportunities in Egypt and abroad."
About The Company
The Company has its origins in 1997 with the formation of Al Ethadia for Real Estate Investment S.A.E. ("Al Ethadia"), which was established for the purpose of developing the "Palm Hills 6th of October" residential development in 6th of October City on the west axis of Cairo. The success of that initial project led to Al Ethadia acquiring more land around 6th of October City. By 2005 Al Ethadia had sold over 450 luxury villas and townhouses in the first five stages of the Palm Hills 6th of October project and completed the development of approximately 535,000 square metres in that area, representing stages one to three of the project. In conjunction with its development of Palm Hills 6th of October, Al Ethadia also designed and developed The Club, a sports and social venue that offers training academies, including one associated with Barcelona Football Club, a health spa and several restaurants.
In January 2005, the shareholders of Al Ethadia established PHD under the Egyptian Investment Law in order to take advantage of a favourable tax regime available to companies organised under that law. Since the formation of the Company, Al Ethadia's business has been limited to completing the remaining stages of the Palm Hills 6th of October development. Stages one through three of Palm Hills 6th of October were completed in 2005, and stages four and five are expected to be completed by the end of 2008. Accordingly, the time allocated by Al Ethadia's management and staff to the completion of those projects has declined over time, coinciding with an increase in the scope of the development activity undertaken by Palm Hills.
For further information please contact:
James Chandler/Terry Garret/Stephanie Badjonat/James White
Weber Shandwick Financial (London)
Tel: +44 (0)207 067 0700
Randa Nassar
Weber Shandwick Financial (Cairo)
Tel +20122171203
© Press Release 2008
