Palm Hills Development is seeking shareholder approval to return some of its land to the Egyptian government, reports Reuters.

The troubled property developer has scheduled an extraordinary general meeting for shareholders on Thursday 31 March to agree a mandate for returning land.

Palm Hills is currently facing legal disputes that threaten land comprising 7.5 per cent of the company’s 48 million square mile land bank.

A judicial panel in early March concluded the land was priced too cheaply when sold and said the deal should be scrapped.

Palm Hills, which builds mostly luxury units, posted a 2.1 per cent fall in 2010 fourth-quarter net profit.

A note from Egyptian investment bank Beltone Financial suggests the property giant will have to surmount stiff challenges this year.

"We believe the company might face a cash shortfall in the case of a continued slowdown in the real estate market with its high debt and high land liabilites," it says.

"The company has already cut 2011 construction spending by 50 per cent to LE£1 billion and the management does not expect any new sales during first half of 2011," the note adds.