Palm Hills, the property developer from Egypt, had recently announced it had received the approval of its application to raise EGP 600 million or USD85.9 million through a rights issue. The funds raised would assist the company in the financing of its building programme.
The firm has been in the dumps since the Arab Spring event that had removed then President Hosni Mubarak from power. It had been under the microscope as investigations into previous land sales were undertaken by the newly installed government. As a result, client's cancelled their previous purchases and overall, new sales have declined.
The firm currently has 1.05 billion shares outstanding and the new rights issue would offer to the market 300 million new shares. The effect of the shares would be the increase in the company's capital base to EGP2.70 billion.
According to company spokesperson Ibtessam Zayed, "The money will be mainly allocated to finance project construction."
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