SUEZ CANAL REVENUE RISES 18% Y-O-Y TO USD414 MILLION IN JANUARY Source: EFG-Hermes, February 19, 2008
Suez Canal revenue rose to USD414 million in January from USD350.2 million in January 2007, but down from USD426 million in December 2007. Some 1,690 vessels passed through the canal, up from 1,632 in January 2007, but down from 1,815 in December. Revenue for the whole of 2007 rose 20.7% to USD4.6 billion from USD3.8 billion in 2006. The Suez Canal Authority announced in late December it will raise the cost of transiting the waterway by an average 7.1% starting in April, a far more aggressive increase than the average 3% in each of 2006 and 2007. Suez Canal revenue represented 3.3% of GDP in FY2006/07 and accounted for 11% of government revenue.
TRADE DEFICIT RISES IN NOVEMBER AS IMPORTS GROW Source: EFG-Hermes, February 20, 2008
Egypt's monthly trade deficit jumped 63% Y-o-Y in November to USD1.32 billion as the cost of imports, including wheat and petroleum, rose, said the government statistics agency CAPMAS (link here). Imports climbed by 46% Y-o-Y to USD3.11 billion and exports by 35% to USD1.79 billion in November. In 3Q2007 (July-Sept), Egypt’s trade deficit increased 70.5% Y-o-Y to USD5.2 billion. High levels of investment and strengthening consumer demand have been driving the strong import growth, which has outpaced that of exports.
OT INTERESTED IN BIDDING FOR NIGERIA’S NITEL AND M-TEL Source: Bloomberg, February 20, 2008
Orascom Telecom (OT) (link here) is interested in bidding for Nigeria’s incumbent fixed-line operator NITEL (link here) and its mobile subsidiary M-Tel after the Nigerian government cancelled the 2006 sale of a 51% stake in NITEL to Transnational Corporation (Transcorp), said Nigerian Minister of Information and Communications John Ogar Oday. Three other telecommunications companies, Messers Telekom South Africa, Vodacom (link here) and France Telecom (link here), are also interested in bidding. The government cancelled the sale due to Transcorp’s mismanagement, its failure to make the considerable investments and its inability to turn the company around as had been agreed when it bought it, Oday said.
ERICSSON SELECTED BY ETISALAT MISR TO EXPAND ITS MOBILE NETWORK IN EGYPT Source: CNNMoney, February 19, 2008
Ericsson has signed an agreement to expand Etisalat Misr's (AmCham member) (link here) GSM/WCDMA/HSPA network in Egypt. The agreement further strengthens Ericsson's position as the leading supplier of telecom-grade next-generation networks enabling Etisalat Egypt to be a leading operator in technology and innovative services such as mobile broadband in the region. This expansion brings Etisalat Misr's total investment with Ericsson equipment and services to more than EUR 200 million to date.
Under the agreement Ericsson will deliver a complete turnkey buildout of the mobile network, including GSM and WCDMA/HSPA radio access equipment, microwave transmission and a core network including Mobile Softswitch, and is also contracted to expand the Convergent Charging and Billing solution. The turnkey solution includes site acquisition, civil works, supply, installation, testing, commissioning and integration services. This further enhances Etisalat Misr as one of the first operators in Northern Africa to deploy GSM and WCDMA/HSPA technologies in its network, providing the highest capacity and data rates for new user applications, powered by Ericsson's equipment and solutions.
TELECOM EGYPT TO LOSE ITS LANDLINE MONOPOLY Source: Cellular-News, February 24, 2008
Egypt's telecoms regulator has announced plans to break the country's monopoly on landline telecoms services and issue the country's second operator license. The National Telecom Regulatory Authority (NTRA) (link here) said that tender documents will be made available from the middle of next month. The Authority calls on consortiums of local and global companies to present their offers on Thursday, June 19, 2008," the announcement said. Orascom Telecom and Etisalat (link here) have previously said that they would bid for a landline license if one was offered. Telecom Egypt (AmCham member) (link here) owns 48.97% in Vodafone Egypt (AmCham member) (link here), which would presumably preclude the company from bidding for the license.
EGYPT LAUNCHES NUCLEAR ADVISORY INTERNATIONAL TENDER Source: IJ, February 20, 2008
Egypt has launched an international tender for consultancy services for its groundbreaking nuclear power plant project. Among the services required by the Nuclear Power Plants Authority are: site selection & evaluation, pre-contract activities & preparation of contract and financial assessment.
Worley Parsons (link here) and Arup (link here) are reportedly among the firms to have already expressed an interest in the tender. The proposed facility, which may be sited at El-Dabaa on the Mediterranean coast, would be Egypt’s first nuclear power plant. The cost of the plant is estimated to be between USD 1.5 bn and USD 2 bn.
A pre-tender meeting to answer questions will be held in Cairo at the end of March. Deadline for bids is May 15.
EGB TO SET UP MORTGAGE AND CAR TRADE SUBSIDIARIES Source: Al-Mal, February 18, 2008
Egyptian Gulf Bank (EGB) (AmCham member) (link here) will establish two subsidiaries, one to offer mortgage finance and the other to offer car trade services, each with a paid-in capital of EGP50 million, said bank chairman Omar Alseesi. It will also form an alliance with a local investment bank to offer brokerage services by 2H2008 but has not yet decided on the nature of the partnership. EGB also plans to acquire minority stakes in companies with sound earnings performance to generate capital gains. The bank has already acquired more than 25% of Arab Investment for Urbanization Co., and it plans to expand its exposure in the petrochemical, fertilizer, telecom and gas industries. On the lending side, EGB aims to finance investments by the corporate sector, leveraging on generally improved transparency and disclosure to expand its client base beyond the top 250 borrowers in the banking sector. EGB plans to raise its paid-in capital to EGP1 billion by the end of 2009 from EGP575 million, Alseesi added. Its capital adequacy ratio now exceeds 12%. The bank’s newly operating retail lending unit has captured 10% of the bank’s total loan portfolio in 2007, mostly through consumer and auto loans and credit cards, said Alseesi.
EGYPT AUCTIONS EGP3 BILLION IN 6-YEAR BONDS Source: Reuters, February 19, 2008
The Central Bank of Egypt (CBE) (link here) accepted offers worth EGP3 billion in an auction of 6-year bonds, with rates ranging from 9% to 9.34%. The central bank, acting on behalf of the Ministry of Finance (link here), invited offers for EGP3 billion at Monday's auction. The bonds mature on 19 February 2014 and carry a coupon rate of 9.20%. Egypt plans to issue EGP-denominated eurobonds in the first quarter of 2008.
CIB LEAD-MANAGES EGP497 MILLION LOAN TO PALM HILLS Source: Al-Alam al-Yom, February 19, 2008
Commercial International Bank (CIB) (AmCham member) (link here) is lead-managing an EGP497 million loan to real estate company Palm Hills Developments (link here). Five other banks are participating in the loan: Egyptian Arab Land Bank (link here) and Housing and Development Bank (AmCham member) (link here), each with EGP150 million, Bank of Alexandria (AmCham member) (link here) with EGP97 million and BLOM Bank Egypt (link here) and Egyptian Saudi Finance Bank (AmCham member) (link here) each with EGP50 million. Palm Hills will use the medium-term loan, which matures in 3.5 years, to finance its future expansion, said CIB vice chairman Sahar Al Salab. The company will expand its developments in Sixth of October, New Cairo, the North Coast, Ain Sukhna and Hurgada, added Palm Hills chairman Yasseen Mansour.
HDB TO ESTABLISH EGP10 MILLION JOINT VENTURE TO MANAGE FUNDS Source: Al Mal, February 19, 2008
Housing and Development Bank (HDB) (AmCham member) is establishing a joint venture with Delta Rasmala Securities (link here) to issue and manage investment funds. The venture, which will have a capital of EGP10 million, will target investments in the real estate, tourism sectors, and possibly at a later stage the food industries sector, said Delta Rasmala co-chairperson Niveen El-Tahry. It will begin operations in few weeks. The new company may list the real estate fund for public subscription, she added. HDB had received several offers from investment banks to pair up with it to establish of an investment fund, mainly targeting real estate and tourism.
BAHRAINI BANKS CLOSE DEBT FACILITY FOR EGYPTIAN PORT Source: IJ, February 18, 2008
Bahraini banks Ahli United Bank (AUB) (link here) and Arab Banking Corporation (ABC) (AmCham member) (link here) have closed the USD 480 million financing for Damietta International Port Company (DIPCO). The loan, which has a tenor of 19 years, will be used to finance 75 percent of project capex and capitalization of interest up to phase one of the completion date.
AUB and ABC were the intial Mandated Lead Arrangers (MLAs) and were joined in financing by African Development Bank (link here), Banque Misr (BM) (AmCham member) (link here) and National Bank of Egypt (NBE) (AmCham member) (link here). The transaction launched into general syndication on 4 February with ABC and AUB acting as international bookrunners and BM acting as local Egyptian bookrunner.
DIPCO was formed in 2006 to execute a 40-year concession to construct, develop and operate a Greenfield container terminal in the Port of Damietta on Egypt’s Mediterranean coast, 70 km west of the Mediterranean entrance to the Suez Canal.
The Project is expected to cost around $650m and includes (i) dredging of port basin, turning circle and access channel, (ii) construction of quay walls, (iii) purchase and installation of equipment, and (iv) development of the Terminal area and container yard. The facility’s estimated handling capacity of 4 million TEUs (after second phase completion) will make the terminal one of the largest trans-shipment facilities in the Mediterranean and one of the few capable of handling the new generation of large containerships.
KUWAITI KHARAFI GROUP TO BUILD A USD500 MILLION HOTEL IN MARSA ALAM Source: Al Rai Newspaper, February 25, 2008
Kuwait-based Kharafi Group (AmCham member) said it plans to build a USD500 million hotel in Marina Port Ghalib in Marsa Alam at the Red Sea, said the group's president Nasser Al Kharafi. The project, which will occupy 1.25 million square meters, will be the biggest of its kind at the Red Sea, Al Kharafi added.
OCI INVESTS IN FERTILIZERS AND DOUBLES STEEL PRODUCTION CAPACITY Source: Reuters, February 27, 2008
Fertilizers…
OCI (AmCham member) (link here) said it was taking over the fertilizer activities of UAE Company Abraaj Capital (link here) in exchange for cash and shares worth about $1.59 billion. OCI will pay $874.5 million in cash and issue to Abraaj about 12.77 million new OCI shares through a capital increase, subject to approval by shareholders. As part of the deal with the United Arab Emirates firm, OCI is assuming $1.1 billion in net debt, the OCI statement added. OCI chief executive Nassef Sawiris said the addition of Abraaj's fertilizer businesses would help OCI become the world's fifth largest nitrogenous fertilizer producer by 2010.
Steel…
OCI will build a steel fabrication plant on the Red Sea coast for 450 million Egyptian pounds ($81.8 million) through a subsidiary. OCI said the plant would have an annual production capacity of 80,000 tonnes, and that it would raise OCI's annual steel fabrication capacity to around 120,000 tonnes, including existing plants in Ain Sokhna and in Algeria. OCI’s fully-owned subsidiary National Steel Fabrication would build the plant in an industrial park in Ain Sokhna that is managed on a concession basis by the Suez Industrial Development Company, an OCI subsidiary.
HABIBA REAL ESTATE EXPANDS IN CAIRO Source: Al-Bawaba, February 23, 2008
Habiba Real Estate (link here), one of the fastest growing real estate companies in the region, announced its further international expansion schedule within the launch of Habiba Real Estate in Cairo which offers competitive residential, commercial and leisure properties through its dedication to excellence and commitment to clients.
With growth of over 150% annually, the real estate industry has been highlighted as a dynamic field with areas for development in 2008.” commented Maged Hassan, CEO, Habiba Real Estate. “Currently, Habiba stands with a very strong market presence internationally with sales of over 1,100 properties worth a total volume of 245 million USD. The introduction of our company in Egypt will spur the market and enable individuals across Egypt to own their own home with expert assistance to capitalize on positive interest.”
GOVERNMENT TO INTRODUCE NEW PROPERTY TAX Source: Al-Alam al-Yom, Al-Ahram, February 19, 2008
Residential units with a value below EGP250,000, or 90% of all the residential units in Egypt, will be exempt from a new property tax the government plans to introduce, said Finance Minister Youssef Boutros-Ghali. The tax calculation will be as follows: Housing units with a value of EGP250,000 to EGP1 million will pay an annual EGP0.70 for each EGP1,000; those with a value of EGP1 million to EGP2 million will pay EGP1 for each EGP1,000; those with a value of EGP2 million to EGP5 million will pay EGP1.70 for each EGP1,000; and those with a value above EGP5 million will pay EGP2.00 to EGP2.50 for each EGP1,000. Taxes on land for industrial investors will be taken from the factory’s profit as a part of costs, Boutros-Ghali added. The government provides land for industrial investors at a price of EGP200 per meter. Housing units that industrial investors build for their workers will be tax exempt, since their value will not exceed EGP250,000, he said. Units that are not finished or being refurbished will be still subject to the new property tax, said Boutros-Ghali. This is to prevent tax evasion by keeping units unfinished and to accelerate the finishing and delivery of units to owners, he added. The total receipts under the current property tax have been EGP175 million to EGP200 million annually over the past five years. This is expected to rise to EGP1 billion to EGP1.5 billion under the new law, he added.
GOVERNMENT TO STRENGTHEN CMA SUPERVISORY ROLE, LOWER MINIMUM LISTING REQUIREMENT Source: Al-Ahram, February 27, 2008
The government is preparing amendments to the Capital Market Law that would strengthen the supervisory role of the Capital Market Authority (link here); said Investment Minister Mahmoud Mohieldin. The amendments give the CMA more power to monitor price movements and the use of insider information. They would also facilitate debt issuance by local and foreign companies and lower the minimum par value requirement for listing companies to EGP0.10 per share from the current EGP1.00.
NUBARIA SUGAR CO. TO START SUGAR PRODUCTION Source: Al-Gomhuria, February 19, 2008
Nubaria Sugar Co., Delta Sugar’s (link here) 30% owned associate, will start producing sugar soon at a factory in the west Delta governorate of Beheira, said managing director Mohamed Hassaan. The factory, which cost EGP800 million and is Nubaria’s first, will have a production capacity of 125,000 tons of sugar, 50,000 tons of fodder and 50,000 tons of molasses every year using sugar beet as its raw material. It will also be able to refine 125,000 tons of raw sugar in the beet off-season, added Hassaan. The factory will utilize 40% of its capacity in 2008. Within six months of the plant beginning operations, Nubaria will start building a new production line with a capacity of 125,000 tons of beet sugar and an investment cost of EGP500 million, Hassaan said.
CITADEL JOINT VENTURE BUYS EGYPT MEDIA GROUP STAKE Source: BI-ME, Reuters, February 26, 2008
A joint venture of Egypt-based private equity firm Citadel Capital (AmCham member) (link here) acquired 61% of the Egyptian Company for Marketing and Distribution, which owns the financial daily newspaper Al Mal. The publishing company's chairman and managing director, Hazem Sherif said Al Kateb Publishing Company, of which he owns 51% and Citadel owns 49%, had acquired 61% of the firm at a price to earnings (PE) ratio of 8. "Al Kateb will give 10% of shares to the management through a leveraged buyout, which is the first of its kind for a newspaper in the Middle East," he added.
The company, which launched its daily Al Mal newspaper in January, would increase its capital from LE 1.5 million to LE 7.5 million as a result of the transaction. Citadel Capital, which was established in 2004 with less than US$500,000 of capital, now controls some US$7 billion of investments in oil, agriculture, mining and building materials. The private equity firm said in January it had raised LE456 million in new capital from existing shareholders, bringing its total to LE 1.65 billion, to finance recent acquisitions, including its purchase of Canadian oil exploration firm Rally Energy Corp. (link here) in a deal worth US$843.2 million.
DUBAI PORTS CONCLUDES PURCHASE OF 90% OF EGYPTIAN CONTAINER HANDLING Source: Nooz, Al-Ahram, Thomson Financial, February 19, 2008
Dubai Ports Company concluded its purchase of 90% of the Egyptian Container Handling Company (ECHCO) for EGP3.68 billion. ECHCO is the controlling shareholder of Sokhna Port Development Co (SPDC), which operates Sokhna Port on the Red Sea east of Cairo, said DP World (link here). Amiral Management Corporation (AmCham member) (link here) will continue to hold 10% of ECHCO. The Ministry of Transport approved the purchase provided that the company invests USD1.3 billion in Sokhna Port (link here) over the next three years. The new company will construct a 1,300 meter long wharf with a draft of 16 meters.
EGYPTAIR PURCHASES ANOTHER SIX EMBRAER JETS Source: ANBA, February 19, 2008
EgyptAir (link here) has converted into firm orders six purchase options of the Embraer (link here) 170 commercial jet, according to information disclosed by the Brazilian company. The Egyptian airline had already purchased six aircraft of the same model. According to Embraer, the value of the new contract is US$ 189 million.
The jets, according to Embraer, will be configured in just one class and will have a capacity for 76 passengers each. Deliveries should begin in 2009. According to the Brazilian company, the aircraft should be used by EgyptAir Express, a subsidiary of the Egyptian airline, in domestic and regional routes.
The chairman at EgyptAir, Atef Abdul Hamid, said, according to a statement by Embraer, that the company is very satisfied with the model and that it presents "unique combination of operational flexibility, distinctive passenger comfort and highly attractive economics in a market that demands efficient services."
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