Cairo-based Arab Contractors, one of the largest construction firms in the Middle East, will sell four percent of its shareholding in El Mostakbal for Urban Development (El Mostakbal) to two local banks, its Chairman and CEO said.

El Mostakbal is the master developer of Mostakbal City being constructed in New Cairo over an area of 45 million square metres. Arab Contractors holds a 14.95 percent stake in the developer.

The deal with Banque Misr and the National Bank of Egypt (NBE) will be finalised in mid-July and is worth 2.53 billion Egyptian pounds ($131.13 million), Mohsen Salah told Thomson Reuters Projects in a telephone interview on Sunday.

Banque Misr and NBE already own 40 percent and 4.98 percent respectively of El Mostakbal, according to the master developer’s website. National Investment Bank (34.42 percent) and Misr Capital Investment Company (5.65 percent) constitute the remaining shareholders.

Salah said each bank would buy two percent and that the company would use the funds to pay off debt to the two banks, support its capital base and invest in some projects.

"The agreement allows the company to re-purchase those shares in stages or in one deal in mid 2020 at the latest…such a deal will include interest to the banks to be agreed on later," he said.

Arab Contractors’ profits more than doubled to 532 million pounds ($29.7 million) during fiscal year 2016-2017 from around 201 million pounds ($11.2 million) during 2015-2016, Salah added.

[1 USD = 17.92 Egyptian pounds]

(Reporting by Marwa Abo Elmajd; Editing by Anoop Menon)

(anoop.menon@thomsonreuters.com)

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