Palm Hills Developments' share price hit a record low after the company's board approved returning a land plot to the government to ease "future financial burdens".
The developer's shares dropped 5.9 per cent to 1.27 Egyptian pounds, the lowest since the company listed in May 2008.
Palm Hills's board has approved returning an 190-feddan (82 hectares) plot on the outskirts of Cairo, the company said in a filing to the Egyptian Exchange yesterday. The company had not developed or marketed the property, located on the eastern part of Sixth of October City, the statement said.
Property companies in Egypt are dealing with a string of legal challenges to their land holdings since a court ruled last year that a state deal with Talaal Moustafa Group, the country's biggest developer, was illegal.
Palm Hills is facing two court cases contesting the legality of its purchases of state land from the government.
Palm Hills Katameya, which is 85 per cent complete, and Palm Parks, which is 50 per cent complete, are the subject of the two cases.
These two plots represent less than 7.5 per cent of the developer's total land bank.
Property sales in the country have been subdued since the revolution that ousted Hosni Mubarak as president. Palm Hills said it had delivered 909 units since last year and 256 since February. The group plans to deliver 1,210 units in the next six months.
The company in June reported a first-half loss of 81.4 million Egyptian pounds, compared with a profit of 191.4m in the same period last year.
Analysts said the company's mounting debt and liabilities might cause it to sell some assets.
"It's no secret. They haven't got money, so they need to return the land," said an analyst who did not want to be identified. Yasseen Mansour, the company's chairman, was acquitted of graft charges in July.
Shares of Palm Hills have declined 80 per cent this year, bringing the company's market capitalisation to 1.3 billion pounds.
[ halsayegh@thenational.ae ]
How to come clean about financial infidelity
- Be honest and transparent: It is always better to own up than be found out. Tell your partner everything they want to know. Show remorse. Inform them of the extent of the situation so they know what they are dealing with.
- Work on yourself: Be honest with yourself and your partner and figure out why you did it. Don’t be ashamed to ask for professional help.
- Give it time: Like any breach of trust, it requires time to rebuild. So be consistent, communicate often and be patient with your partner and yourself.
- Discuss your financial situation regularly: Ensure your spouse is involved in financial matters and decisions. Your ability to consistently follow through with what you say you are going to do when it comes to money can make all the difference in your partner’s willingness to trust you again.
- Work on a plan to resolve the problem together: If there is a lot of debt, for example, create a budget and financial plan together and ensure your partner is fully informed, involved and supported.
Carol Glynn, founder of Conscious Finance Coaching
The five pillars of Islam
Empty Words
By Mario Levrero
(Coffee House Press)
Mohammed bin Zayed Majlis
Sweet Tooth
Creator: Jim Mickle
Starring: Christian Convery, Nonso Anozie, Adeel Akhtar, Stefania LaVie Owen
Rating: 2.5/5
Tips for newlyweds to better manage finances
All couples are unique and have to create a financial blueprint that is most suitable for their relationship, says Vijay Valecha, chief investment officer at Century Financial. He offers his top five tips for couples to better manage their finances.
Discuss your assets and debts: When married, it’s important to understand each other’s personal financial situation. It’s necessary to know upfront what each party brings to the table, as debts and assets affect spending habits and joint loan qualifications. Discussing all aspects of their finances as a couple prevents anyone from being blindsided later.
Decide on the financial/saving goals: Spouses should independently list their top goals and share their lists with one another to shape a joint plan. Writing down clear goals will help them determine how much to save each month, how much to put aside for short-term goals, and how they will reach their long-term financial goals.
Set a budget: A budget can keep the couple be mindful of their income and expenses. With a monthly budget, couples will know exactly how much they can spend in a category each month, how much they have to work with and what spending areas need to be evaluated.
Decide who manages what: When it comes to handling finances, it’s a good idea to decide who manages what. For example, one person might take on the day-to-day bills, while the other tackles long-term investments and retirement plans.
Money date nights: Talking about money should be a healthy, ongoing conversation and couples should not wait for something to go wrong. They should set time aside every month to talk about future financial decisions and see the progress they’ve made together towards accomplishing their goals.
