Dubai’s Arabtec ‘looks to build 13,000 homes in Egypt’

Proposal is separate from stalled agreement for 1 million homes, says chairman of Dubai-listed builder

PHOTO: Arabtec is reportedly pursuing a new deal to build homes in Egypt after a previous agreement stalled. Credit: Shutterstock

Arabtec, the Dubai-listed contractor, has submitted a proposal to Egypt’s government to build 13,000 homes in the North African country, the firm’s chairman has said.

Mohamed Thani Murshed al-Rumaithi told Reuters that the new proposal is completely separate from the Memorandum of Understanding signed in March 2014 to build one million new homes by 2020.

Since then, the two parties have failed to agree final terms on that deal, leaving it in limbo.

“We assume that they will accept soon,” al-Rumaithi said on the side-lines of a conference in Abu Dhabi, though he declined to provide further details.

Arabtec earlier this month reported losses for a fourth straight quarter, with a “difficult environment” contributing to a 24% decline in revenue.

In a statement to the Dubai Financial Market, the contractor said it made a net loss attributable to equity holders in the parent of AED944.78 million ($257 million) in the third quarter.

Revenues from continuing operations declined to $435.6 million, as compared to the $571.7 million posted in Q3 2014.

Arabtec added however that it had made good progress on two new projects for Emaar Properties, worth a combined $272.2 million during the quarter. These included building villas at the developer’s Arabian Ranches project.

“2015 will be a very, very tough year. That’s the reality because of the losses the company has faced,” said Rumaithi, who became chairman in May.

A number of senior executive have left Arabtec in the last 18 months, including the chief executive and chief financial officer. Shares in the company have fallen by 85% from a peak in May 2014 as a number of provisional agreements failed to materialise into firm contracts.

Abu Dhabi state fund, Aabar, is a 36% stakeholder in the company according to data from the Dubai Financial Market.

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