14 Jun 2010 07:00
Palm Hills Development
Explanatory Memorandum
PHD Legal Position as to Tut Amoun Tourist Village
On 13/1/2008, Palm Hills Developments Company received an invitation from Consultant Group (Concord) that is responsible for the technical studies and promotion activities of Misr Aswan Tourist Company relating to the purchase of Tut Amoun Tourist Village that overlooks Lake Nasser at the Governorate of Aswan, covering an area of 238 feddans (two hundred thirty eight feddans).
On 5/2/2008, Palm Hills Developments Company purchased from Misr Aswan Tourist Company the tender book of specifications and data memorandum wherein the bid opening date session is scheduled on 28/2/2008 and postponed to 30/3/2008.
On 30/3/2008, Palm Hills Developments Company submitted a financial offer with an irrevocable letter of guarantee attached thereto, issued on 27/3/2008 by the Commercial International Bank in the amount of EGP 3,000,000 (three million Egyptian pounds) as bid security to participate in the tender. After the envelopes were opened, it was evident that the financial offer submitted by Palm Hills Developments Company comprised three methods of payment as follows:
First Offer:
The amount of EGP 84,250,000 (eighty-four million two hundred fifty thousand Egyptian pounds) to be paid in cash.
Second Offer:
The amount of EGP 90,224,358 (ninety million two hundred twenty-four thousand, three hundred fifty eight Egyptian pounds) to be paid and 50% of which is to be paid in cash and the remaining 50% to be paid on the basis of four equal quarterly installments.
Third Offer:
EGP 101,640,000 (one million and one, six hundred forty thousand Egyptian pounds) to be paid as follows: 30% of the value in cash, 70% on equal quarterly installments in addition to 50% constituting sale and evaluation commission.
The above mentioned third offer represented the best of the financial offers submitted and a committee composed of Misr Aswan Tourist Company decided to grant a postponement to a session scheduled on 7/4/2008, in order for the offers to be enhanced.
On 1/4/2008, after the bid opening session was concluded, Palm Hills Developments Company was surprised to receive from Gezirat Amoun Tourist and Real Estate Investment Company a warning not to purchase Tut Amoun Tourist Village since it had previously been awarded to Gezirat Amoun Tourist and Real Estate Investment Company by the selling Company, in return for the amount of ninety million Egyptian pounds payable on the basis of 30% down-payment with the receipt of the village together with the assets thereof, and the balance thereof to be paid on the basis of quarterly installment for a period of two years after a grace period of 24 months. Moreover, a legal dispute existed in this concern, subject of the two courts cases Nos. 3950 of 2007 (North Cairo Court) and 1316 of 2008 (Cairo Summary Court).
On 7/4/2008, the committee composed of Misr Aswan Tourist Company met with the bidders for the enhancement of their offers. At this session, Palm Hills Developments Company submitted to Misr Aswan Tourist Company the warning sent by Gezirat Amoun Tourist and Real Estate Investment Company. However, Misr Aswan Tourist Company confirmed its entitlement to offer Tut Amount Tourist Village for sale a second time and that it would be fully liable for all rulings rendered in the legal action existing between it and Gezirat Amoun Tourtist and Real Estate Investment Company.
Due to existence of said legal action and in order for Palm Hills Developments Company to protect its shareholders' right, Palm Hills Developments Company offered to pay the value of Tut Amoun Tourist Village in the amount of EGP 84,250,000 in addition to a commission of 5% for sale and evaluation assessed at EGP 4212500, as follows:
1) 10% of the value of the cash offer to be paid, in addition to the commission for sale and evaluation assessed at 5% of this offer, immediately upon being awarded the tender.
2) The balance of EGP 75,825,000 (seventy-five million eight hundred and twenty five thousand Egyptian pounds) to be paid pursuant to the signing of the final sale contract by the legal representative of Misr Aswan Tourist Company conveying title to the Village under reference to Palm Hills Developments Company and the latter Company's receipt of the entire sold area, including the buildings existing on the land, within a period of six months as from the date of the award of the tender.
Furthermore, Misr Aswan Tourist Company would be totally liability for the legal action existing between Misr Aswan Tourist Company and Gezirat Amoun Tourist and Real Estate Investment Company.
Misr Aswan Tourist Company agreed to this offer in writing and, consequently, Palm Hills Developments paid EGP 12637500 (twelve million six hundred thirty seven thousand, five hundred Egyptian pounds), by virtue of two checks with a maturity date thereof on 15/5/2008. Accordingly, a preliminary sale contract was issued on 20/7/2008 based on this agreement.
Immediately upon the registration by Misr Aswan Tourist Company of a portion of the area of Amoun Tourist Village amounting to 200 feddans, 2 kirats and 7 sahms (two hundred feddans, two kirats and seven sahms), Palm Hills Development Company submitted application No. 22 of 2009, Aswan Real Estate Registration and Notary Office, to register this area. However, Gezirat Amoun Tourist and Real Estate Investment Company had filed Case No. 1147 of 2010 North Cairo Commercial Court of First Instance against both Misr Awan Company and Palm Hills Developments Company seeking the cessation of the ongoing procedures relating to said application.
At the hearing of 29/9/2009, a judgment was rendered in the two Cases filed by Gezirat Amoun against Misr Aswan Tourist Company deeming that the Award Decision in the First Bidding dated 14/7/2007, in favor of Gezirat Amoun Tourist and Real Estate Investment Company, is a preliminary sale contract for the whole land and buildings of "Tut Amoun Village and obliged Misr Aswan Tourist Company to hand over same to said Company.
The North Cairo Court of Appeal upheld said judgment by virtue of the judgment rendered at the hearing of 27/4/2010 in the two Cases of Appeal No. 1061 and 1046 of 13J.
In light of the foregoing, it is obviously evident that Palm Hills Developments Company has proceeded with the bidding and contracted with Aswan Misr for Tourist Company in accordance with the provisions of the law and in complete transparency, and that it has not received the land or the buildings constructed thereon nor has it established or sold any projects to third party.
In response to the news that was published in Al-Ahram Newspaper on 12/6/2010, concerning Palm Hills Developments Company allegedly having sub-sold said land to another company, the news is fabricated, stands groundless and lacks all evidence of law and facts.
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