Developer Talaat Mostafa Group's (TMGH) land contract for its Madinaty project is valid, an Egyptian court ruled on Tuesday, signalling an end to a long-running legal battle over the $3 billion scheme.
The development of shops, homes, hotels and a golf course has been caught up since last year in a dispute over the purchase of land directly from the state instead of by public auction.
The court decision, confirmed by both TMG and the plaintiff, engineer Hamdy Fakharany, cannot be appealed. However, both Fakharany and TMG said they would challenge the ruling in the higher administrative court.
While Fakharany maintained that the whole contract should be ruled invalid, TMG said it would contest a part of the ruling stating that unutilised parts of the land should be revalued.
TMG shares climbed 7.6 percent after the ruling.
"We believe that TMG's legal saga has effectively ended," said Jan Hansman, an analyst at EFG-Hermes. "This is very positive news for the company and, in our view, it is likely to remove the overhang on TMG's shares in the short term," Hansman added.
Source: Reuters
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