Arabtec has confirmed that it is in talks with international and local banks in an attempt to finance the first phase of a US$40 billion project to build 1 million homes in Egypt.
The UAE’s largest listed construction company yesterday said it was in discussions with lenders to finance construction of 100,000 low-cost homes in the cities of Obour and Badr to the east of Cairo.
In a statement to the Dubai bourse yesterday, Arabtec said that it was “confident that the appropriate financing will be obtained according to the best conditions in fulfilment of the best interests of the company and its shareholders”.
The firm added that despite reporting that the long-awaited deal had been agreed by Egypt's ministry of housing on April 2, nearly three weeks later it still had not signed a final contract. "The company will be signing the final contract for phase one of the project with the new urban authority of the Egyptian ministry of housing at the earliest opportunity," Arabtec said.
In March the then Arabtec chairman Khadem Al Qubaisi told The Wall Street Journal that the developer was hoping to secure between US$100 million and US$200m in bank finance to kick-start the project.
Analysts complain that Arabtec, which is 36.11 per cent owned by the Abu Dhabi government fund Aabar, has not provided enough information about the Egyptian deal for them to be able to evaluate it.
Plans spread across 13 sites were first announced a year ago by the Egyptian president Abdel Fattah El Sisi, with construction originally scheduled to start in the final quarter of 2014, taking just five years.
The deal was widely regarded as part of a funding package from the UAE aimed at maintaining stability in the region following the Arab Spring protests. But talks stalled over the number of units to be provided in lieu of land payments.
Arabtec shares closed 1.67 per cent lower yesterday ahead of its annual general meeting.
lbarnard@thenational.ae
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