Sodic Slumps on $90M Land Settlement Report: Cairo MoverAhmed A. Namatalla and Tamim Elyan
Six of October Development & Investment Co. fell the most in more than six months after Al Mal reported the company stands to pay almost 30 percent of its market value to the government to keep a disputed Cairo plot.
The stock dropped 5 percent, the most since June 12, to 22.79 Egyptian pounds at the close in Cairo on more than twice its three-month average daily traded volume. That compares with a 0.2 percent retreat in the benchmark EGX 30 Index and trims the company’s value to 2.07 billion pounds ($300 million).
The Cairo-based luxury property developer will pay the Egyptian government 620 million pounds to keep a piece of land on the capital’s eastern outskirts for a housing project, Al Mal newspaper reported today, citing an unidentified Housing Ministry official. The 860,000 square-meter plot was purchased in 2005 and had been withdrawn by the government on claims it wasn’t developed on time.
“This was a surprise for the market,” Nermeen Abdel Gawad, real estate analyst at Cairo-based HC Securities who has a neutral rating on the shares, said by phone. The reported settlement amount “is way higher than what was expected. It might affect the company’s margins.”
The company, also known as Sodic, didn’t receive official correspondence from the Housing Ministry on a settlement to the land dispute and is continuing construction on site, it said in a regulatory filing in response to the report.
Today’s loss pares Sodic’s gain this year to 12 percent, compared with a 23 percent advance for the benchmark gauge. The stock has 11 buy recommendations and 4 holds, according to data compiled by Bloomberg.