Rights Issue - Second Subscription Round

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES, CANADA, JAPAN AND AUSTRALIA

Palm Hills Developments S.A.E. announces an invitation to its existing shareholders and purchasers of subscription rights to subscribe for shares not subscribed to in the initial subscription round of the company's capital increase from EGP 2,096,640,000 to EGP 2,696,640,000, representing 300,000,000 shares (the "Rights Issue")

Cairo, 16 December 2013: Palm Hills Developments S.A.E. (the "Company") is honoured to invite its existing shareholders and purchasers of subscription rights to subscribe for shares not subscribed to in the initial subscription round of the Company's Rights Issue, amounting to 12,781,625 shares (the "Second Subscription Round"). The initial subscription round to the Rights Issue was covered through subscription to 287,218,375 shares, representing a take-up of approximately 95.74%.

Applications for subscriptions in the Second Subscription Round shall be without restriction to the participation percentages in the shareholding of the Company or the rights derived therefrom, and shall be subject to the same terms and conditions as contained in the announcement published on 13 October 2013 in the Stock Exchange Journal, Al Maal, Al Masry Al Youm and Al Akhbar newspapers.

Right to subscribe

The Company's existing shareholders, purchasers of shares up to the end of the trading session of 28 October 2013 who maintain the right to subscribe, and purchasers of rights during the subscription period that ran from 4 November 2013 to 2 December 2013, are entitled to apply for subscription to the unsubscribed shares without limiting application to either the shareholding percentages or rights derived therefrom. In the event that applications for subscription exceed the number of remaining shares, allocation shall be based on the ratio of the requested shares to the remaining shares and any fractional entitlements shall be rounded in favour of minority subscribers, provided that any overpaid amounts resulting from the allocation shall be refunded to applicants within one week of the date of closing of the subscription period through the Arab African International Bank, being the bank receiving the subscription.

Terms of Payment

The full amount of the subscription price, which is two Egyptian pounds plus issuance expenses of three piasters per share, shall be paid.

Period of Subscription

The Second Subscription Round shall be open for seven days from Tuesday 17 December 2013 to Monday 23 December 2013, inclusive, and if the subscription is not covered in full during the Second Subscription Round, the subscribed shares shall be deemed sufficient.

Receiving bank

Applications for subscription shall be received by the Arab African International Bank in any of the following branches:

Required Documents

A copy of the identification card for any natural person or the commercial register for any legal entity, together with the document evidencing entitlement to subscribe (statement of the shareholder's account issued by the depository agent indicating his right to subscribe).

Investor Relations Officer

Ms. Ola Tayel

Important notice to purchasers of subscription rights

In accordance with the terms and conditions of the invitation extended to the Company's existing shareholders to subscribe to shares in the Rights Issue of the Company published on 13 October 2013, and the disclosures previously displayed on the monitors of the Egyptian Stock Exchange, the trading of the subscription rights terminated on 2 December 2013. Therefore, purchasers of subscription rights who fail to subscribe to the Rights Issue of the Company during this phase should note that the subscription rights previously purchased and not subscribed for in the Rights Issue shall become valueless and no legal or financial liabilities shall ensue vis à vis the issuing company from the acquisition thereof.

For Further Information:

Miss. Ola Abdel Maksoud Tayel

Investor Relations Officer

Smart Village, Abou Rawash, 6th October City

Tel: + (202) 3535 1608

Fax: + (202) 3535 1208

DISCLAIMER:

These materials are not an offer for sale of any securities in the United States. The Company has not registered, and does not intend to register, any portion of the Rights Issue in the United States, and does not intend to conduct an offering of any securities in the United States. These securities may not be offered or sold in the United States absent registration or an exemption from the registration requirements of the U.S. Securities Act of 1933, as amended.

This document does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefore. The Rights Issue and distribution of this document and other information in connection with the Rights Issue in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

No person has been authorised to give any information or to make any representations other than those contained in this announcement and, if given or made, such information or representations must not be relied on as having been authorized by the Company. In addition, no agent or representative of the Company accepts any responsibility whatsoever for the contents of this document and no representation or warranty express or implied, is made by any agent or representative as to the information set out in this document. Subject to the Listing Rules, the Prospectus Rules and the Disclosure and Transparency Rules, the issue of this announcement shall not, in any circumstances, create any implication that there has been no change in the affairs of the Company or any of its subsidiaries, joint ventures or restricted affiliates, since the date of this announcement or that the information in it is correct as at any subsequent date.

Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

This document contains forward-looking statements, which include all statements other than statements of historical facts, including, without limitation, any statements preceded by, followed by or including the words "targets," "believes," "expects," "aims," "intends," "may," "anticipates," "would," "could" or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the Company's actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which it will operate in the future.

These forward-looking statements speak only as at the date of this document. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any of such statements are based.

The information contained herein is restricted and is not for publication, distribution or release, directly or indirectly, in or into the United States, Canada, Japan or Australia.

This communication is only directed at (i) persons who are outside the United Kingdom or to (ii) persons who are either (a) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (b) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). The securities referred to herein are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this communication or any of its contents.

Any offer of securities to the public that may be deemed to be made pursuant to this communication in any EEA Member State that has implemented Directive 2003/71/EC (as amended and together with any applicable implementing measures in any Member State, the "Prospectus Directive") is only addressed to qualified investors in that Member State within the meaning of the Prospectus Directive. This document is an advertisement and not a prospectus for the purposes of the applicable measures implementing the Prospectus Directive and as such does not constitute an offer to sell or the solicitation of an offer to purchase securities.