Business News

57 companies for sale in 2002
Minister of Public Enterprise Mokhtar Khattab announced that the government intends to offer 57 companies for sale in 2002. The government sold 5 companies in January and February 2002 at a total value of LE315 million and is currently negotiating the sale of 8 more companies, to reach 13 companies by June 2002 valued at LE750 million.

accommodation in GranadaBank of Kuwait to submit tender
Barqan Bank of Kuwait has indicated its interest to acquire Misr America Bank. In addition, Barqan has finished its due diligence to acquire 40 percent of Al Watany Bank of Egypt. According to bank officials, the Kuwaiti bank will submit a tender offer in mid-May.

50 million loan for Cairo Metro
The European Investment Bank is providing 50 million Euros for a long-term loan to extend the southern end of Line 2 of the Cairo Metro from Giza to Al-Mounib. The extension is being implemented by the National Authority for Tunnels, a department of the Ministry of Transport. The Cairo Metro Organization that operates the entire network will also operate the new section of Line 2. The Cairo Metro’s two lines in operation are currently used by 700 million passengers per year.

Eastern Tobacco profits down
Eastern Tobacco announced 9-month FY2002 results, in which net profits decreased 16.3 percent to LE179.94 million compared to LE215.51 million in the same period of FY2001. Profits were dragged down due to a 13 percent increase in COGS to LE1.3 billion, which led to a 13 percent decrease in gross profit to LE381.39 million. However, interest expense fell 76 percent to LE4.41 million, and income tax decreased 8 percent to LE92.83 million.

Algerian projects worth $62 million
Arab Contractors has signed contracts to implement two projects in Algeria worth around US$62 million.

Telecom Egypt secures loan
Telecom Egypt has secured an LE800-million medium-term syndicated loan from nine local banks and three foreign banks, including Banque Misr, Bank of Alexandria, CIB, MIBank, Al Watany Bank of Egypt, NSGB, Citibank, Cairo Barclays, Credit Lyonnais Francais, Egyptian Saudi Finance, Arab Banking Corporation, and Arab Bank.

EAB still for sale
Bank of Alexandria’s Chairman Mahmoud Abd El Salam announced that Bank of Alexandria and American Express still intend to sell their combined 76 percent stake in Egyptian American Bank (EAB). Abd El Salam highlighted that the plans to offer EAB for sale have been merely postponed until market conditions improve.

LE250 million investment
The Holding Company for Electricity has established an Egyptian shareholding company called the Electricity Company for Telecommunication and IT Services, with investment capital of LE250 million. The Holding Company for Electricity will own a 51 percent stake in the company, while Click-Vodafone and Alkan for Investments will own the remaining 49 percent stake.

No dividends from Cairo Barclays
Cairo Barclays released FY2001 results, in which net income reached LE45 million, 6.4 percent below 2000 earnings. Net interest income came in at LE84.3 million in, down 7.1 percent year-on-year. The bank will not distribute dividends for 2001.

3rd mobile network in 2003
Telecom Egypt has received five offers from international telecommunication companies to design and implement Egypt’s third mobile network. Three of the companies have shown interest to participate in the operation of the new network. TE’s management estimates the start date of the network will fall in the first quarter of 2003.

Egyptian Gulf Bank earnings down
Egyptian Gulf Bank released FY01 results, in which net earnings decreased 12 percent to LE17.68 million compared to LE20.08 million in FY00. Net interest income was down 40.3 percent to LE22.18 million, resulting from a 27 percent fall in interest income to LE131.15 million offset against a mere 9 percent reduction in interest expense to LE130.28 million. The decline in net interest income was partially offset with a 94.05 percent rise in forex income to LE51.4 million, thereby softening the fall in net earnings. Profits were also dampened by a 3 percent increase in provisions to LE49.02 million, and a 4 percent increase in general and administrative expenses toLE41.36 million.

Power station finance approved
The Kuwait Fund for Arab Economic Development has approved financing for a 1,500-MW power station in Nubariya. The new plant will have an investment cost of US$400 million.

Cairo Pharmaceuticals revenues up
Cairo Pharmaceuticals announced 1H FY2002 results, in which net income rose 7.3 percent year-on-year to LE16.4 million. Revenues showed an 8.6 percent increase to LE86.8 million.

AL Nasr Clothes profits surge
Al Nasr Clothes and Textiles (KABO) released FY01 results, in which net profits remained stable at LE16.24 million compared to LE16.07 million in FY00. Despite a drop in revenues of 1.8 percent year-on-year to LE132.7 million, gross profit surged 26 percent to LE25.81 million as a result of a 7 percent decrease in COGS to LE106.9 million. Gross profit was offset by a 36 percent fall in investment income to LE7.79 million. Moreover, forex losses shot up to LE16.47 million versus LE1.3 million in FY00. General and administrative expenses inched up 3 percent to LE6.85 million, while interest expense increased 4 percent to reach LE13.85 million.

$118 million loan from AMF
Egypt has concluded an agreement with the Arab Monetary Fund for a US$118 million loan to reform monetary policy and banking supervision regulations.

Egyptians Abroad cash dividend
Egyptians Abroad for Investment and Development distributed a cash dividend of LE0.75/share on May 1.

2.1 million share sale
Industrial Development Bank announced its interest to sell its 2.1 million shares of Medical Union Pharmaceuticals, representing a 6.38 percent stake in the company, to a strategic investor or a group of investors. The offered stake will allow representation on the BOD. The bidding process closed May 16.

Pilkington offer to acquire shares
Pilkington International Holdings, a wholly owned subsidiary of Pilkington Plc, announced a tender offer to acquire 1.6 million shares or 90 percent of Egyptian Glass Company (with a minimum of 70 percent of capital) at LE167.00/share. Pilkington’s aims to increase its stake to between 80 to 100 percent of the company. Pilkington currently owns 10 percent of Egyptian Glass.

Interest to increase Iranian stake
According to Al Alam Al Youm, Bank of Alexandria has started the process of valuing Misr Iran Development Bank in a step towards increasing the Iranian stake in the bank from 20 percent to 40 percent.

OT signs $454million agreement
According to Reuters, Orascom Telecom (OT) signed the US$454 million agreement for the Tunisian license it won earlier this year, on May 13. OT had delayed the signing, requesting that the Tunisian Telecommunication Ministry postpone the date in order to raise funds to pay the 50 percent first tranche of the licensing fee (which should have been paid by April 27), with the second tranche payable by December 2002. OT’s bid beat the second best contender, Spain’s Telefonica Mobiles, whose bid came at US$450 million.

World Bank $50million loan
The World Bank approved a US$50 million loan on April 16 to support improvements in Egypt’s higher education system. The loan will be repaid over a 17-year period, including a 5-year grace period. Funds will be disbursed from 2003 to 2007.

LE75 million debt written off
Germany has written off LE75 million of Egypt’s external debt. The LE75 million will be directed to the Social Fund for Development to finance infrastructure projects.

Profits quintuple
Kafr Al Zayat Pesticides announced 9-month FY2002 results, in which net profits quintupled to LE10.09 million compared to LE1.94 million in the same period of 2001. Profits were boosted by a 36 percent jump in sales to LE58.2 million, coupled with a 24 percent rise in COGS that to LE45.52 million, leading to a doubling of gross profit to LE12.69 million. Other income surged 79 percent to LE3.76 million. General and administrative expenses remained stable at LE4 million, while interest expense increased 10 percent to LE2.08 million.