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More details regarding a potential Ras El Hekma sale: The government and Talaat Moustafa Group (TMG) could together retain a 20% stake in the North Coast’s Ras El Hekma after Abu Dhabi takes over the USD 22 bn development of the parcel of seaside land, Bloomberg reported on Thursday, citing people it says are familiar with the talks.
Refresher: The news came a day after the General Authority for Investment and Freezone (GAFI) head Hossam Hieba confirmed that officials were in talk about a potential investment and its size after days of rumors regarding the project. He also said that an Emirati consortium had been picked to develop the 180 mn sqm parcel of land.
Cabinet said in a statementon Thursday that only the prime minister’s office will make an announcement regarding “large investment projects” and while it doesn’t name Ras El Hekma, the timing of the statement has led us to believe that the statement was triggered by Hieba’s remarks on the project. The cabinet is yet to confirm that the project is happening, while the press is yet to offer any indications of who the buyer would be (ADQ, a consortium of developers, or another institution) or what the development timeline might look like. It’s also unclear how much of the purchase price would be paid up-front or what the construction timeline would look like. Heiba made clear in his remarks earlier in the week that the buyer would be responsible for lining up project finance.
By the numbers: The land is likely valued at USD 18-21.6 bn, given the average price per square meter along the North Coast stands at USD 100-120, according to Bloomberg calculations.
More to come? A committee of ministers is currently reviewing “investment offers for important projects that are expected to generate huge resources of foreign currency,” Prime Minister Moustafa Madbouly said on Thursday. The state will announce the details “following the completion of negotiations with investors,” Madbouly said.
Gearing up for the expected devaluation: The agreement comes as the government seeks to fill up the central bank’s USD coffers ahead of the anticipated currency devaluation. Cabinet is said to want at least USD 6 bn in hand before floating the EGP — a key requirement for unlocking a larger IMF package.
