Dubai: Arabtec said on Sunday it will commence the $40 billion Egypt project immediately and has made positive progress with the Egyptian authorities.

In March, the company had said it would start the project in the third quarter of this year and complete the project by 2020. The project, which will cover 160 million square metres across 13 sites in Egypt, would boost not only Arabtec’s business in the region, but also boost the country’s economy.

However, the project went into uncertainty after the resignation of its former chief executive, Hasan Ismaik. Media reports had suggested that Arabtec was no longer committed to its project in Egypt.

In a statement to the Dubai Financial Market (DFM) on Sunday, the company said it will commence the project immediately after the finalisation of the planning and design stages, which have been nearly completed after achieving significant progress.

The company said it plans to commence the project as soon as possible, “which will reflect positively on the company and its shareholders.”

 

Potential distraction

“We are expecting it [the Egyptian project] to be launched,” said Rami Sidani, head of investments in the Middle East for Schroders.

“We are waiting for Aabar buying the stake of the CEO, once those things stabilise, it will end the conflict within the management,” Sudani said. “It will be positive once the potential distraction ends for the management.”

Arabtec’s former chief executive, Hasan Ismaik, who resigned abruptly in June, holds about 28 per cent in the company. Ismaik had said earlier that he was in talks with Abu Dhabi state fund, Aabar Investments, to sell part of his stake.

But on September 16, the company said it was unaware of any rumoured stake sale by its former CEO. Arabtec was at the centre of a selloff in June that wiped more than 20 per cent off the value of Dubai’s benchmark stock index, triggered by management changes and investor concern the company may be losing support from Abu Dhabi.

Abu Dhabi state fund Aabar Investments owns 18.94 per cent in Arabtec, the largest publicly traded construction company in the Middle East.

Arabtec, which was the second most active stock on the DFM on Sunday, was trading 2.41 per cent lower at Dh4.46 per share.