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Al-Ahram Weekly 19 - 25 August 1999 Issue No. 443 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 19 - 25 August 1999 Issue No. 443
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Features Profile Travel Living Sports Time Out Chronicles Cartoons Letters Orascom fans out
ORASCOM Telecom (OT), along with an Arab contracting company, have won the mandate to establish and operate a mobile phone network in Algeria.According to the $1 billion deal, OT and its partner, the United Arab Emirates Company, will form a joint venture with the Algerian state-owned Holding Company for Telecommunications to develop a cellular phone network to serve a projected subscribers base of 1.5 million within the next five years. The Egyptian investment banking firm EFG Hermes was OT's financial adviser.
With this deal, OT has expanded its regional mobile phone services and telecommunications activities' base to include another Arab country.
In addition to its being a 28 per cent shareholder in Egypt's MobiNil, OT is a major shareholder in the Jordanian Fastlink company which operates the local mobile phone network. It also has a one-year contract to operate Syria's first cellular phone grid and is currently preparing to submit an offer to do the same in Yemen.
OT, whose name was previously Orascom Technologies, was recently divided into two companies, Orascom Technologies and Orascom Telecom.
The company is preparing for a LE900 million worth of share offerings on both the local and international markets, in the form of Global Depository Receipts.
A stake in Misr Aluminium
A YET TO BE named US company, rumoured to be the giant aluminium producer Alcoa, was given the green light last week to assess the Misr Aluminium Company as a potential investment.This followed the signing by the Holding Company for Metallurgical Industries of a Memorandum of Understanding (MOU) with the American company.
According to the MOU, the US firm will conduct a "due diligence" study for Misr Aluminium as a preliminary step to buying a stake in the company.
The US company has until next March to evaluate the Egyptian firm and to submit a purchasing bid to the holding company, the memorandum said.
The holding company divested an eight per cent stake in Misr Aluminium in January 1998 through the Cairo Stock Exchange. This stake was smaller than the original offering that the holding company floated which ended up undersubscribed.
Misr Aluminium has strong potential, but the poor response was attributed to the offering being overpriced and the company's production technology being out-of-date. The shares were first offered at LE71.25, but they dropped sharply to LE27.94 last week. Company profits during fiscal year 1997/1998 stood at LE34.6 million, 75 per cent lower than the previous fiscal year's level.
Misr Aluminium Company is among some public sector enterprises in which the government has decided to retain a 60 per cent equity because aluminium is considered a strategic industry.
Euro aid
THE ANNUAL report of the European Investment Bank (EIB) says that Egypt has acquired 1.3 billion ecus in financial assistance from the bank from the mid-seventies to the end of 1998.Most of these funds, according to the report, were either directed to industrial projects or extended as loans to the banking sector, which itself lent this money to medium and small-sized projects.
The bank, within the framework of the Euro-Mediterranean Partnership agreement, has allocated 2.3 billion ecus in the form of grants and soft loans to 12 Mediterranean countries, including Egypt, during two years ending in December 1999.
The bank has been giving much attention to the non-European members in the Euro-Mediterranean Partnership Agreement, such as Egypt, Israel, and Morocco. EIB has given Israel 300 million ecus in financial aid since 1987 through four economic cooperation protocols.
EIB's aid to Egypt includes financing a plan by EgyptAir, the national carrier, to buy a new fleet of planes as well as a project to increase production lines in the Alexandria National Company for Steel Rebars and another project to produce waste water pipes in Alexandria.
Positive assessment
THE WORLD Bank and the International Development Association (IDA) recently approved $550 million in aid to finance six development projects in Egypt during the fiscal year 1999/2000.Sahar Nasr, economist with the World Bank's Cairo office, said that $205 million of the amount pledged for 1999 is provided by IDA.
According to Nasr, IDA's credits to Egypt have a 35-year maturity, 10-year grace period and an interest rate of 0.75 per cent per annum. Nasr added that the remaining $345 million is provided by the World Bank and has a 20-year maturity and five-year grace period.
These loans will be directed to aiding rural development, social protection, secondary education, private sector support and agricultural development.
Laurie Effron, manager of the Operations Evaluation Department (OED) in the World Bank, visited Cairo last week to evaluate for the first time the role of the World Bank in Egypt.
Nasr said that during Effron's visit to Cairo she met officials, experts and businessmen with whom she discussed the extent to which the Bank has been effective in Egypt during the past few years.
Though the evaluation report about the World Bank role in Egypt has not yet been finished, it initially seems positive.
Nasr added that during the coming years, the role of the World Bank will be modified to offer more technical assistance than financial assistance.
