Arabtec hits back at Egypt housing minister over ‘limited project’

Arabtec, the Dubai contractor, said it is still waiting to hear from Egyptian authorities regarding its huge housing project as it denied reports that its ambitious programme is now “limited”.

The company’s shares were suspended for a short period this morning while a disclosure was made to the Dubai Financial Market in response to comments from Egypt’s housing minister Mustafa Madbouly.

The shares closed down 4.7 per cent at Dh0.98. They are down nearly 65 per cent for the year.

The original plan for US$40 billion joint venture between Egypt and Arabtec, announced in March last year, was to build 1 million homes for middle-income Egyptians by 2020.

But Mr Madbouly played down the potential size of the development in comments reported by Reuters.

He said the latest proposal from Arabtec foresees the construction of just 13,000 units in the first phase. “The company had continuous change of its board and its strategy and its policy,” he said. “They limited their ambitious programme. It’s not the project we were expecting.”

He added that Egypt needed to build 500,000-600,000 new homes a year to keep up with demand, 70 per cent of which should be aimed at the poor.

Arabtec chairman Mohamed Al Rumaithi last month said that the project has been segmented into phases, with 13,000 units in the first phase followed by “100,000, and then to 200,000, and so on”.

Despite the housing minster’s comments, Arabtec says it is waiting on an update at the Egyptian end.

“Please be advised that the company denies the news, as we have not had any feedback from the Egyptian authorities and we are still waiting to hear from them,” said acting chief executive Saeed Al Mehairbi in a statement to the bourse.

“In this context, the company confirms its full commitment to the principles of disclosure and transparency, and will update you on any developments in this regard.”

Arabtec has endured a tumultuous 18 months since former chief executive Hasan Ismaik departed in June 2014. It has undergone major restructuring with changes in senior management.

It posted third quarter losses of nearly Dh1bn, taking its cumulative loss for the first nine months to Dh1.94bn, and said last month that it was continuing its restructuring and cost-reduction programme.

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