CAIRO: Beleaguered Egyptian property developer Palm Hills denied a newspaper report that the government cancelled a sale of land to the company, saying it still held the plot on Cairo's western edge. Financial daily Al-Mal reported on Thursday that Egypt's New Urban Communities Authority (NUCA) had cancelled the sale of 190 feddans (183 acres) of land in Sixth of October City to Palm Hills. It did not give a source for the information. "The company had asked NUCA to discuss the possibility of returning the mentioned plot of land and the body responded that it did not mind," Palm Hills said in a statement in response to Al Mal's article. If the land, which remains undeveloped, is returned to NUCA, installments for the land will be converted to pay installments on other land that the company owns to reduce its liabilities and improve its cashflow, the company said. It said the plot of land in Sixth of October City is still under Palm Hill's ownership. No one from NUCA could immediately be reached for comment. EFG-Hermes said that canceling the land sale would have "minimal downside impact" on the company's valuation. "We believe that the amount that the company has already paid for the land can be transferred to cover a portion of outstanding liabilities on other land plots that it has purchased from NUCA, after adjustment for administrative fees," EFG-Hermes said in a note. Palm Hills shares have tumbled 59 percent this year, the worst performer on Egypt's benchmark share index. Chief Executive Yasseen Mansour faces criminal charges of wasting public money. In March, a judicial panel concluded that a sale of land in another Cairo suburb to Palm Hills was illegal because it was priced too cheaply and said it should be scrapped. The company has said it may return some land to help it manage cash flows. It says plots of land being contested represented less than 7.5 percent of its total land bank. But analysts say it faces mounting debt and liabilities that might cause it to sell some assets.
