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Ruling on Madinaty land postponed until January

Egypt's Administrative Court sets 16 January to rule on validity of contracts in Talaat Mostafa Group's flagship Madinaty project

Ahram Online, Reuters, Wednesday 7 Nov 2012
Madinaty land
Madinaty land (Photo: Al-Ahram)
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An Egyptian court will rule on 16 January in a dispute over Talaat Moustafa Group's (TMG) flagship real estate project, a case being closely watched as an indicator of the investment environment.

In 2010, before an uprising unseated President Hosni Mubarak, a court ruled to cancel the sale of state land for TMG's $3 billion Madinaty development, saying the sale method meant it was sold too cheaply.

At the time, the government formed a committee that revalued the land and accordingly a new contract was signed in November 2010 between the government and TMG.

According to the new contract, the Egyptian government would receive 7 per cent of the project's residential units as the price of the land. The value of these units is estimated at LE15 billion ($2.5 bn) or LE460 pounds per square meter.

The case has rumbled on, as efforts by the authorities to settle the row have faced legal challenges.

Judge Mounir Sedky said on Wednesday the court would rule on 16 January on the settlement arranged by the government. While a panel of judges had recommended in July that the court cancel the settlement, that recommendation is not binding.

TMG shares were up 3.3 percent at 1140 GMT, outpacing a 0.2 percent firmer benchmark index.

Other real estate firms have also faced challenges to purchases of state land during Mubarak's era. Opponents say the land was sold too cheaply.

Adding to investor worries, the government of President Mohamed Mursi has said it would pursue corrupt deals, which some fear raises the prospect of further challenges to old deals.

 

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