Egypt's Palm Hills to launch Red Sea project, bonds

Egypt’s Palm Hills to launch Red Sea project, bonds

Bullish on Mediterranean coast home sales.

August 10, 2010 8:51 by Reuters

Egyptian real estate firm Palm Hills Developments said on Monday it would relaunch a delayed Red Sea development in the fourth quarter of 2010 and start marketing a bond issue by the end of the year.

The company is stepping up construction work on its projects, including developments in Cairo and on the Mediterranean coast, which will keep its cash flows negative in 2010, 2011 and possibly 2012, executives said in a conference call.

“I think the name of the game for us over the coming three to four years is ‘execution, execution’,” Chairman Yasseen Mansour said.

The firm will start completing homes in its Haciendabay development on Egypt’s Mediterannean coast during the third or fourth quarter of this year, Mansour said.

Mansour said he expected sales on Egypt’s north coast to be some 50 percent higher this year than last, helping the company reach 14 billion to 15 billion Egyptian pounds ($2.5-2.7 billion) worth of unfinished projects by the end of the year.

A project in Ain Sukhna on the Red Sea that was held up by red tape will be relaunched in the last week of September or the first half of October, he added.

Palm Hills said on Sunday it recorded the most ever reservations of new units in the second quarter of this year, although net profit was down on 2009.

The company will start marketing up to 1 billion Egyptian pounds of bonds before the end of the year after an initial delay, Mansour said.

“We’re hoping to go ahead and start marketing our bond issue before year-end,” he said. “We’re sticking to our old issuance, anywhere from 500 million to 1 billion Egyptian pounds.”

Mansour said the company owned enough land for now, but would start looking to expand east of Cairo “pretty soon,” eyeing plots of 2 million square metres or more.

(Reporting by Alexander Dziadosz; Editing by Greg Mahlich)