Lakah free to return
FLEEING businessman Rami Lakah is finally off the hook. He is no longer banned from entering or leaving the country. Lakah fled the country almost eight years ago to dodge unpaid bank debts. Lakah and his brother Michel and their 16 companies owe some LE2.139 billion in credit facilities to several Egyptian banks. Through debt settlement negotiations he paid LE1.4 billion. The banks Lakah is indebted to are Misr Iran Bank, the National Bank of Egypt, the International Islamic Bank for Investment and Development (currently United Bank), the Egyptian Saudi Finance Bank, Banque du Caire (Currently Banque Misr) and the Egyptian Commercial Bank (currently Piraeus Bank).
New privatisation options
A NEW public sector asset management law is in the making, according to Mahmoud Mohieldin, minister of investment. The law is still being discussed within the ruling National Democratic Party. Mohieldin told members of the American Chamber of Commerce at their monthly luncheon that the government had inherited a heavy portfolio of public sector companies that were indebted by LE32 billion. That debt, he said, had been reduced to LE4 billion. This improved status, according to Mohieldin, gave the government possibilities it did not have before. He suggested that public sector companies may now be floated on the stock market or run by management contract. He noted that the only option the government had before was to liquidate the company or sell it to a strategic investor.
ENPI 2011-2013 funding committed
THE EU has allocated 5.7 billion Euros for the period 2011-2013 to reinforce political cooperation and promote economic integration with partner countries under the European Neighbourhood and Partnership Instrument (ENPI). According to Baroness Catherine Ashton, vice-president of the European Commission and high representative of the EU for foreign affairs and security policy, the EU aims at fostering stronger links of economic integration adapted to partners' wishes and capacities. "Increased EU funding is an important tool to achieve these goals," she said.
Under the ENPI, Egypt is entitled to a total of 449.3 million Euros during the next three years, which is considered the highest among other countries after Morocco that receives 580.5 million Euros and Ukraine at 470.1 million Euros. Other beneficiaries include Algeria, Jordan, Lebanon Syria and Tunisia. For the first time a country programme was laid out to Libya, which is entitled to receive 60 million Euros during the same period.
The allocated funds will cover a new country programme in Egypt, an inter-regional programme to finance students' exchange in addition to supporting physical investment in transport, energy and environment sectors.
The European Neighbourhood Policy (ENP) was developed by the EU in 2004 as a tool to promote economic integration as well as to support reforms to stimulate economic and social development.
Russell 20-20 in Cairo
A 50-STRONG delegation from the Russell 20-20 Association was in Cairo this week to gain in-depth knowledge of the local investment climate. Russell 20-20 is a non-profit association of leading global financial firms that represent over $8 trillion of investment capital. The organisation focuses on evaluating opportunities in emerging markets. They were in Egypt this week to educate themselves on possible investment opportunities.
Speaking at a luncheon hosted by the American Chamber of Commerce, Michael Phillips, chairman of Russell 20-20 Association, explained that the association had started off by looking at investments in obvious emerging markets like Brazil, Russia, India and China. Now, he said, "we are looking at new frontiers which include Egypt."
On a similar note, Vera Trojan, senior vice-president, partner and equity portfolio manager at Wellington Management, a member of the association, said the delegation was impressed with the strong economic fundamentals of the country and how solid growth followed reforms. She pointed out the potential of the Egyptian economy in terms of consumption, its productive labour force, and the potential for consumer lending. However, her concerns included inflation, the fiscal deficit and government debt. Nonetheless, she said Egypt is the most interesting market in the region.