CAIRO: Egyptian property developer Palm Hills moved to assuage concerns over its future, voicing confidence in the Egyptian market and promising to deliver over 1,000 units in the next six months.
Palm Hills, which is taking the brunt of Egypt’s economic woes and a widening graft probe against business executives linked with ousted president Hosni Mubarak’s administration, has seen its shares tumble 65 percent since the start of the year.
Yasseen Mansour, until recently the company’s chief executive, is among those facing criminal charges of wasting public money.
A statement from the company on Thursday was signed by Mohamed Soltan, identified as the company’s new CEO. Although some investors said they had learned of a change in leadership, the firm has not announced formally that Mansour was replaced.
"Egypt has seen a great deal of change followed by anticipation and uncertainty," Soltan wrote in a note to the stock exchange. "We at Palm Hills are confident that Egypt will pass this stage and become stronger than what it was.
"We will always support this great nation, with faith in its solidity and its long-term economic outlook," he added.
Court cases
The firm, the country’s second biggest listed developer, has been reeling from two court cases contesting the legality of its purchases of state land from the government.
A court ruled in April that a land sale to Palm Hills was illegal, one of a series of rulings that have alarmed investors in the country’s once-booming property sector.
The company has also said it would return some land to help it manage cash flows. It has already returned two plots, a decision Soltan said the firm made to be more effective in managing its land bank.
"We would like to point out that all land-related cases are isolated only to two projects, Palm Hills Katameya, on which the firm has finished 85 percent of construction, and Palm Parks, on which we are nearing 50 percent completion," he said.
"We affirm the management’s commitment to make all effort to protect the rights of the firm and the interests of its clients," Soltan added.
Palm Hills said it delivered 909 units since 2010, 256 since February when Mubarak was ousted. The group plans on delivering 1,210 units in the next six months, Soltan said.
The firm’s shares had gained 0.5 percent by 0916 GMT, but analysts said the delivery promise was unlikely to ease concerns about problems ahead.
"We believe that this plan is very challenging in light of the company’s limited liquidity, ongoing legal issues and significant liabilities to be settled in the medium term," said an analyst who did not want to be named.
Egypt’s government has said it will uphold the court ruling to scrap the sale of state land for Palm Hill’s Katameya project, but will ensure the interests of home buyers are not harmed.
