CAIRO: Real estate firm Egyptian Resorts said the tourism development authority had retracted its approval for selling a land plot allocated for the firm’s Sahl Hasheesh resort on the Red Sea.
Egyptian Resorts said it would send a complaint to the authority. It said it had legal rights on the plot for which it paid $7.6 million, or 27 percent of the land’s contract value and paid a further $5.3 million in rent and other costs.
"The General Authority for Tourism Development advises of the cancellation of initial approval issued to the company to allocate land … in Sahl Hasheesh touristic project," the company said a statement.
It said the plot in question in the development covered 20 million square meters.
"The decision came without prior notice or legal justifications or giving the company a chance to correct any errors the authority deems," the statement said.
The firm’s main 41 million square meter plot Sahl Hasheesh resort is also facing a legal challenge after a lawsuit was filed saying the government broke the law in selling the land to the firm.
Shares in Egyptian Resorts tumbled 9 percent by 0902 GMT, while Egypt’s benchmark, EGX30, was up 0.4 percent.
The developer reported a consolidated net loss of LE 9.4 million ($1.58 million) for the full year of 2010.
The firm, which makes most of its money selling land to developers, has not sold any since the third quarter of 2008, when the global financial crisis dampened appetite for big real estate purchases in Egypt.
