The Egyptian Minister of Housing said Wednesday that local developer Talaat Moustafa’s major real estate project Medinaty could continue despite a court ruling that a government body had sold land to the company illegally.
"The ruling does not mean ending the deal, stopping, or the company’s discontinuation of the project," Minister Ahmed El Maghrabi said in a statement on the Egyptian stock market website.
The ruling was based on the fact that Medinaty land was directly given to the company by the Ministry of Housing while typically land is allocated through a competitive bidding process.
The authority received its first installment for the first phase of the Medinaty based on an agreed schedule between the authority and TMG, the minister said in the statement.
The ministry’s legal advisor also said that the authority will appeal the ruling in the higher administration court.
The ruling could still weigh on Talaat Moustafa’s stock, Egyptian HC Securities said.
"While the Ministry of Housing confirmed that existing sales will not be affected, it remains unclear whether the judgment will affect new sales as well or not. We believe that the ruling has negative implications for the stock as Medinaty remains the main value driver for the company," said HC Securities in a note.
TMG said Tuesday that the court case was a dispute between the administrative court and the New Urban Community Authority and had nothing to do with TMG.
Earlier this week, Egypt’s administrative court ruled the contract selling the land to TMG. Medinaty City is located in new Cairo with around 120,000 housing units.