Done deal

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DESPITE a dispute among its main shareholders which threatened to spoil the deal, Emaar Misr signed the final contract to take delivery of the land and hotel at Sidi Abdel-Rahman on Sunday. The contract was signed by Emaar Misr and the Holding Company for Tourism and Hotels, launching the mega tourist resort on Egypt's north coast called Marasi. Signing the contract means that the company has paid the government the full value of the bid it offered last summer to purchase the land.

Shortly before the signing ceremony, it was disclosed that a dispute between the company's main shareholders has been brewing for six months. One side was the UAE-based Emaar group owning 40 per cent of Emaar Misr, and on the other was Egyptian businessman Mohamed Shafik Gabr who both in his personal capacity and through his company Artoc Group owns 10 and 50 per cent, respectively. Emaar Group offered to increase its investments to replace Gabr as majority shareholder, and accused him of not paying his stake in the purchase and acquiring bank facilities for Artoc Group projects while using down-payments for Marasi units as collateral.

The quarrel was made public last week, when a UAE-based newspaper quoted a senior official in Emaar Group as blaming Gabr for the expected low quality of Emaar Misr's projects, compared to other Emaar projects around the world. Gabr retorted that the accusations were groundless and that he and Artoc have paid their share in full, while Emaar Group had not.

He further explained that in the beginning Emaar Group was not interested in Marasi, but has since had a change of heart. This is due to the unexpected high demand on the tourist complex, and now the Gulf partner wants to buy him out. While Emaar Group announced that it is currently negotiating to buy Gabr's stake for $165 million, the tycoon is vehemently denying any agreement has been reached, while negotiations and project evaluations are still being undertaken.

Newspaper reports pointed out that both parties are looking for other partners to join the company through a capital increase. Emaar Misr has a paid in capital of LE400 million and owns many development projects in Egypt. The most prominent of these is Marasi with investments reaching $5.74 billion and Up Town Cairo on the Mokkatam Hills with a $4 billion budget to build 1,000 villas and 4,000 residential units.