File photo: SODIC Allegria housing project under construction in Sheik Zayed on the western outskirts of Cairo, Egypt. (Photo: AP)
In a Monday statement to the stock exchange, Egypt’s third-largest property developer SODIC denied that any lawsuits had been filed against it by international developer Solidere.
On Sunday, Cairo-based investment bank Beltone reported that Solidere had announced plans to take legal action against SODIC to demand that the latter pay LE237 million for its Egyptian subsidiary.
SODIC, for its part, filed its own arbitration case against Solidere and its local subsidiary, in which it claimed that the latter had failed to honour its contractual obligations, the Egyptian developer announced on 11 September.
The dispute relates to a 250,000-square metre plot of land in SODIC’s Westown development, located in Sheikh Zayed City roughly 20 kilometres outside Cairo. According to a timeframe imposed by Egypt's New Urban Communities Authority, the Lebanon-based Solidere has three years to develop the property.
At a Monday press conference, SODIC said that the arbitration case might take between two and three years to resolve.
SODIC Chief Business Development Officer Ahmed Badrawi, for his part, said SODIC's worst-case scenario involved paying back LE160 million to Solidere to regain control of the property in question.
In August, SODIC posted a first-half net profit of LE85.1 million (some $14 million) for 2012, compared to LE120 million in losses for the same period last year.
In 2008, SODIC and Solidere International announced plans to invest LE22 billion in the development of two large mixed-use city centres in both the western and eastern suburbs of Cairo.
On Tuesday, SODIC share prices on the Egyptian exchange dropped 2.28 per cent in midday trading. SODIC shares are currently trading at LE25.67.