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Arabtec directors await developments on Egyptian project

Arabtec directors were due to meet on Thursday after a tough week for the company’s stock that traded down on five consecutive sessions.

The stock fell 0.76 per cent on Thursday to close at Dh2.62 as investors continued to await news of progress on a project to build a million low-cost houses across Egypt.

The stock decline capped a week during which about 6.4 per cent was wiped from the company’s market value.

Its directors were scheduled to meet in the capital to approve the company’s financial accounts for last year.

The builder that helped to build Dubai’s Burj Khalifa, said it was on the cusp of finally signing a key deal with the Egyptian government over the stalled housing deal.

Ambitious plans for the US$40 billion project spread across 13 sites were first announced a year ago with construction originally scheduled to start in the final quarter of 2014.

But talks stalled over the number of units to be provided in lieu of land payments amid reports in the Egyptian press which speculated that the project was no longer going ahead.

Top Arabtec executives flew to Egypt this month to get the high-profile project back on track.

On Saturday the Egyptian housing minister Mustafa Madbuli told reporters that all problems surrounding the deal had been resolved, while a housing ministry media adviser told Reuters on Monday that a final deal on the project would be signed within 10 days.

“The company confirms that it has reached the final stages of concluding the final agreement with the related authorities in Egypt in order to begin the implementation of the first phase of the project as soon as possible,” Arabtec said in a DFM statement on Thursday.

Insiders point out that the comments made by the Egyptian government became more positive after the high-profile Egypt the Future conference last week in which Abu Dhabi state-owned fund Ipic, which controls Arabtec’s majority shareholder Aabar, agreed to partner Cairo-based Orascom to finance a 3,000 megawatt coal-fired power plant in Egypt.

The company’s full year results will be eagerly viewed by investors, keen to get a steer on its direction after third quarter profits last year fell 32.6 per cent compared with the previous year owing to costs associated with a company-wide restructuring.

Source: lbarnard@thenational.ae

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