Privatization
Early Retirement Scheme Under Fire. The Ministry of Public Enterprise Early Retirement Scheme is still capable of giving rise to many questions regarding its benefits, as well as its social impacts as a whole. Questions have reached a fervor pitch with the announcement made by Mokhtar Khattab, the Minister of Public Enterprise. Khattab had indicated that other alternatives to the ERS were being examined, and that contacts have been made with the Social Fund for Development in order to examine the possibility of administering a transitional training program for workers in some of the PE companies up for sale, especially if these workers are still in their youth.
Some experts have indicated that the ERS does not provide a solution for the problems of many PE companies, in addition to the fact that it is a major loss of skilled labor. The ERS is also seen as having negative social impacts, and will further increase the unemployment rate. Some experts have called on the government to refrain from implementing the ERS prior to sale, and to first investigate the needs of investors interested in purchasing these companies. Some investors prefer to maintain the existing workforce and to utilize them in planned expansions while others prefer to implement the ERS prior to sale. Consequently, implementation of the ERS may be delayed until the negotiation stage with the anchor investors.
El Alam El Youm, November 22, 1999, Page 15
El Nasharty in Competition with Kuweiry for Alexandria Confectioneries. Competition between Amr el Nasharty and Taher El Kuweiry, the "National Accountants Group" and the Capital Group for the purchase of Alexandria Confectioneries has neared its final stage. A Ministry of Public Enterprise source stated that the four offers were submitted last week, but did not disclose their value. The envelope opening sessions and valuation of these offers both technically and financially has yet to take place. The Alexandria Confectioneries and Chocolate Company owns six production lines, with total sales last year of approximately LE 24.6 million. The Company owns fixed assets and projects under construction worth another LE 40 million.
Al Alam El Youm, November 22, 1999, Page 1
Ebeid: Water Utility Will Not Be Privatized. Prime Minister Dr. Atef Ebeid denied in statements to the press yesterday that the government intends to privatize the Potable Water Utility. Recent reports had indicated that the government was going to include the utility in the privatization plan.
Al Wafd, November 23, 1999, Page 1
Arab Banking Corporation "ABC" Acquires 66% of Egypt Arab African Bank. Sixty-six percent of the Egypt Arab African Bank (EAAB) was sold to the Bahrain Arab Banking Corporation on Sunday. The shares were sold at LE 50 per share in a deal worth LE247.5 million. Farid Irman, regional manager of Bahrain based Arab Banking Corporation, stated that an agreement has been reached to increase the bank's holding to 95% of ABC's capital at a later stage. EAAB has a total of 7.5 million shares, and a paid in capital of LE 75 million. The amount of shares sold represents the holdings of the AAB Employee Shareholders Association, the AAB, in addition to holdings by prominent shareholders including Mansour, El Maghraby, Atef and Shafik Gabr.
Al Alam El Youm, November 23, 1999, Page 1
Six Companies Compete for Nasr Glass and Crystal Company. Four financial and investment groups are in strong competition for the purchase of a 90% holding in the Nasr Glass and Crystal Company, currently up for sale. The company has a paid in capital of LE 30 million distributed amongst 3 million shares. The competing groups include Sawiris, Al Ahram Beverages, the National Company for Glass and Crystal, and the United Company for Glass. Two other companies had also purchased the prequalification booklet, but their name not been disclosed. The Mining and Metallurgical Industries Holding Company has set December 5th as the deadline for receipt of offers from interested investors. The Holding Company had informed investors that they have the option of buying the company as a whole, or buying one of its factories.
Al Alam El Youm, November 23, 1999, Page 1
Mexican Cemex Seals Assyut Cement Deal. In the largest privatization deal yet, Mexico's Cemex, the world's third-largest cement company, bought 90% of the state-run Assyut Cement Company for LE1.5 billion ($580 million) in cash. The remaining 10% of shares worth LE 112.6 million, were sold to the Employee Shareholders Association. Under terms of the deal, Cemex will acquire 77% of the company for $318.8 million and retain the right to buy an additional 13% for $53.8 million by June 2000. Cemex will assume $207 million in debt, which is 90% of Assyut's $230 million total debt. The company plans to expand Assyut's capacity by 600,000 metric tons a year. The Cemex offer was the only one competing for Assyut Cement, following the withdrawal of the other companies which had withdrawn the prequalification booklet, totaling 13 companies in all.
Al Alam El Youm, November 23, 1999, Page 1
Khattab: Privatization Program to End by 2001. Minister of Public Enterprise Dr. Mokhtar Khattab announced to the press yesterday that the government intends to privatize the remaining 136 public enterprise sector companies by the end of 2001. Privatization of these companies will start with the profitable units, whereas 40 companies will undergo restructuring in preparation for privatization. The government will retain its stake in strategic enterprises such as pharmaceuticals, milling, and transportation.
Al Alam El Youm, November 23, 1999, Page 1
Economy
Council of Ministers Discusses Draft Commercial Dispute Resolution Law. The Council of Ministers will discuss the draft commercial dispute resolution law in its coming meeting. The law will be presented to the People's Assembly during its current session. Farouk Seif Al Nasr, the Minister of Justice, stated that the ministry is planning to amend 57 draft laws in order to make them more encouraging of investment in Egypt, and to facilitate the inflow of foreign direct investment to the country. El Nasr added that coordination is underway with the Ministry of Planning and International Cooperation for the discussion of the draft Intellectual Property Rights Law.
Al Alam El Youm, November 20, 1999, Page 1
Balance of Trade Deficit Drops to LE 21.8 Billion During the Past Six Months. The Ministry of Economy has stated that the balance of trade deficit has dropped by approximately LE 640 million during the past six months, to reach LE 21.8 billion. The drop in the deficit has been attributed to an increase in exports by LE 256 million, and a fall in the level of imports by LE 384 million compared to the same period last year. The value of Egyptian exports, with the exception of fuel, reached LE 4 billion as result of an increase in raw cotton exports by 44.3% compared to previous year, and fully manufactured goods which increased by 6.8%. Free Zone exports also increased by approximately LE 74 million, 47.9%, while semi-manufactured goods exports decreased by 15.3%.
Al Wafd, November 21, 1999, Page 5
CBE Pays Interest on Forex Surpluses to Prevent Forex Exports. During a meeting with bank heads, Central Bank of Egypt Governor Ismail Hassan agreed to pay 0.05% interest on foreign currency surpluses deposited with the CBE. Banks are required to deposit surpluses at the CBE from now until the end of the year instead of transferring them abroad. The CBE governor rejected a proposal to lower the 15% reserve requirement on bank deposits. The CBE governor called on banks to meet the foreign currency requirements of their clients necessary for the conduct of their business or settlement of their debts. The CBE indicated its willingness to provide foreign exchange for banks denying any news that reserve holdings had been adversely affected because of CBE policy in this concern.
Al Alam El Youm, November 23, 1999, Page 1
BOT Projects
Six Investment Groups Compete for the Construction of Three Highways Under the BOT System. Six Egyptian, Arab and foreign investment groups are competing for the award of the BOT contract for the construction of three highways. Engineer Nabil El Kusy, the Chairman of the General Authority for Highways and Bridges, stated that the three routes are "Fayoum-Assiut Highway, the Dairut-Farafra Highway, and the Central Cairo Alexandria Pass. El Kusy stated that competition is now confined to the UAE company Ibn Hafeez, a Cypriot company and the Arab Contractors Group.
Al Alam El Youm, November 21, 1999, Page 1
Government Study Indicates Major Opportunities for Investment in Egyptian BOT Projects. A Ministry of Economy study has indicated the importance of attracting Egyptian and foreign investment to national projects under the BOT system or other similar systems. The study added that a review of Egypt's development strategy over the coming twenty years points to the critical role to be played by this type of investment. The study expects the cost of investment projects included in this strategy to reach over $450 billion, with infrastructure accounting for 25% of these projects. This means that investment in infrastructure totals $100 billion alone. The study indicated that during the coming years, BOT contracts will be offered for the construction of 15 electricity plants feeding into the unified electricity grid. The BOT system has also entered into the area of port and airport investments.
Al Alam El Youm, November 21, 1999, Page 5
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