QIZ Council Formed Source: Egypt State Information Service, February 15, 2006
Minister of Trade and Industry Rachid Mohamed Rachid has formed a council of the Qualifying Industrial Zones (QIZ) (link here) including all companies and factories entitled to benefit from the QIZ Protocol.
To enjoy QIZ council membership, the companies and factories should be in possession of a license to practice their activity in the qualified zones, to fill the registration form, and to designate the representative of the company or the factory.
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LE1.1 Billion Investments in New Sugar Projects Source: Info Prod, February 23, 2006
Egypt is currently installing a new production line at the Dakahlia Sugar Factory. Egypt is also currently studying the possibility of establishing a new sugar factory. The total cost of both projects is estimated at LE1.1 billion, according to Minister of Investment Mahmoud Mohieldin.
Mohieldin stressed the importance of investing in new sugar projects in Egypt in order to bridge the local sugar supply shortage.
LE1 Billion for Small & Medium Scale Projects Source: American Chamber of Commerce in Egypt, February 26, 2006
The American Chamber of Commerce in Egypt (link here) held its monthly luncheon at the Four Seasons Nile Plaza (AmCham Member) (link here) on February 21 with keynote speaker Dr. Youssef Boutros Ghali, Minister of Finance & Social Insurance addressing the topic, “Financing Egypt.”
Minister Ghali unveiled a new plan to deal with the problem of loans in small and medium enterprises (SMEs). The Ministry of Finance & Social Insurance (link here), in coordination with the Central Bank of Egypt (link here) and the Ministry of Trade and Industry (link here), has earmarked LE1 billion to forgive the bad debts of SMEs, which are unable to grow due to the burden of debt. "Starting today, we are going to identify LE 1 billion worth of these non-performing loans with a maximum of LE 20 million per loan and lift the burden off of these enterprises," he said.
Egypt to Sell Stake in EgyptAir Source: Trade Arabia, February 24, 2006
Egypt is preparing to offer 20% of state-owned airline EgyptAir (link here) to the public, in the latest big-ticket privatization in the government's drive to sell off state assets.
"The shares will be offered as soon as the study is complete," Minister of Civil Aviation Ahmed Shafiq commented.
The remaining 80% of EgyptAir Holding Company would stay in government hands to ensure loans for new planes would still get state backing, he said.
The minister did not give a timeframe for the sale or give any indication of a value for the carrier.
EgyptAir Holding Company has several subsidiaries, including the national carrier and associated aviation service companies.
The cabinet, appointed in 2004 with a mandate to liberalize the economy, has revived a privatization programme, which had slowed almost to a halt.
OCI Announces Rights Issue-based Capital Increase Source: Market Wire, February 15, 2006
Orascom Construction Industries (OCI) (AmCham Member) (link here) announced that it has formally invited its shareholders to subscribe in a capital increase that will be conducted through a rights issue totaling 11.5 million new ordinary shares at a price of LE201.
The right issue price is based on the historical closing averages of the OCI share price on the Cairo &Alexandria Stock Exchanges (CASE) (AmCham Member) (link here). The proceeds of the capital increase amounting to LE2.3115 billion will be used to co-finance expansions and new investments within OCI's core business activities. In the event of full subscription, the increase in issued capital will be LE57.5 million while the balance of the proceeds amounting LE2.254 billion will be recorded as reserves on the Company's balance sheet.
Retail Movers Drop CASE But Further Growth is Expected Source: Middle East Economic Digest, February 24, 2006
After an unprecedented 11-month rally, the Cairo & Alexandria Stock Exchanges (CASE) (AmCham Member) (link here) finally saw an overdue correction in the first three weeks of February. The broad-based Hermes Financial Index (HFI), which had soared by 42% to a record high of 68,994.73 points between November 30 and February 1, closed at 59,714.05 points on February 21.
Despite the drop, the index is still up 14% on the beginning of the year. Top performing stocks in 2006 so far include EFG-Hermes (AmCham Member) (link here), El-Ezz Steel Rebar (AmCham Member) (link here), Egyptian Kuwaiti Holding, Olympic Group (AmCham Member) and Orascom Telecom (link here).
The correction was driven by a combination of factors, notably profit-taking after the market’s November-February surge and the launch of capital increases worth a combined $741 million by EFG-Hermes and Orascom Construction Industries (OCI) (AmCham Member) (link here), which led to the liquidation of stocks as investors sought to raise funds to buy into the offerings. Another factor came into play, when retail investors relatively new to the market – and some of them leveraged – sold out once the market began to fall.
Despite the latest correction, the market is expected to put in a positive performance throughout 2006, if at a slower pace than last year, which saw the HFI soar by 105%.
Strong corporate performances are expected to support this trend. “We will see slower corporate earnings growth this year compared with 2005,” says Nashwa Saleh, executive director and head of research at the local HC Brokerage (AmCham Member).
“[Average] corporate earnings were up 70% last year and are expected to rise by 30% this year, which is still not bad at all.” Activity at the CASE will also receive a boost from the government’s privatization program, under which several IPOs will be launched this year.
Among the transactions coming up are offerings in Egypt Aluminium (link here)and Bank of Alexandria (AmCham Member) (link here). The positive market outlook is further supported by healthy economic conditions – a balance of payments surplus, increased consumer spending and ongoing appetite for emerging markets with comparatively cheap valuations – like Egypt – from GCC and Western investors.
UK Banks Line Up for Bank of Alexandria Sale Source: Global News Wire, February 19, 2006
HSBC (AmCham Member) (link here) and Barclays (AmCham Member) (link here) two of Britain's biggest banks, are weighing up possible bids for Bank of Alexandria (AmCham Member) (link here), one of Egypt's most prominent banks.
Bank of Alexandria had earlier announced that strategic investors would be invited to present offers where the bank is to float 20% of its capital on the local stock exchange, keep 5% for employees and sell the balance to an investor.
France's BNP Paribas (AmCham Member) (link here) is also considering a bid ahead of March's proposed sale of state-owned Bank of Alexandria, which has $6.54 billion of assets.
A source familiar with the situation said Barclays, which established Bank of Alexandria in 1957, is assessing various targets in the market and has asked to see the Information Memorandum that will be sent out on Alexandria in the next few weeks. A second source said that HSBC, which lost out on Egyptian American Bank (EAB) (AmCham Member) (link here), is a front-runner to buy Alexandria.
Local player Commercial International Bank (AmCham Member) (link here) is also keen, as is Bank Audi (link here) of Lebanon, but the Egyptian government prefers an international buyer. Credit Agricole (link here) and Societe Generale (link here), two other big French banks, are believed to have ruled out bidding.
US-based Citigroup (link here) is conducting the sale of Bank of Alexandria, the first of four big Egyptian banks being privatized.
Government of Egypt paid off about $1.2 billion of Alexandria's bad debts to promote the sale of the state-owned lender and to demonstrate its commitment to cleaning up the country's financial services industry.
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OT Secures $2 Billion Committed Bank Facility, Launches Algeria Project Source: Mena Report, February 23, 2006
Orascom Telecom Holding SAE (link here) has announced that it had secured a five-year senior secured debt facility totaling $2.0 billion on a committed and underwritten basis.
The facility will be used to repay the current holding company indebtedness of Orascom Telecom, which includes approximately $650 million and the $1.2 billion vendor note issued by Hutchison Whampoa Limited (link here) in connection with Orascom Telecom's acquisition of a 19.3% stake in Hutchison Telecom International Limited (link here) announced on December 21, 2005.
The facility will be initially secured against Orascom Telecom's direct and indirect interests in MobiNil (AmCham Member) (link here), Egypt's leading GSM mobile operator, and the HTIL stake.
The four banks that have committed to underwrite the facility are ABN AMRO (link here), Citigroup (link here), Credit Suisse (link here) and Deutsche Bank (link here). Orascom Telecom is in the process of finalizing agreements with major Egyptian banks to formalize their leadership roles prior to the launch of a general syndication of the facility.
Meanwhile, the “Consortium Algerian de Telecommunications” announced the launch of fixed line services in Algeria under the brand name Lacom. Consortium Algerian de Telecommunications, a joint venture between Orasco Telecom Holding and Telecom Egypt (link here), has launched its fixed line telecommunication services in Algiers and announced plans to extend its coverage and introduce other innovative telecommunication services throughout the Algerian market during the coming years.
In May 2005, the consortium was awarded a 15-year renewable license to operate fixed line, local, national and international telecommunication services by the Algerian Post (link here) and Telecommunications Regulatory authority for $65 million. Since then the consortium has embarked on deployment of state of the art network infrastructure for the delivery of Next Generation Network Services to the Algerian Market.
HP, NEPAD e-Africa Commission and Government of Egypt Sign MOU Source: Mena Report, February 23, 2006
HP (AmCham Member) (link here) has announced the signing of a Memorandum of Understanding (MoU) with the Government of Egypt and the e-Africa Commission (link here) , paving the way for the launch of the third NEPAD e-school in the Northern African region. The objective of the NEPAD e-schools initiative is to supply African schools with an educational technology solution including computer hardware, software, Internet connectivity, technical support and teacher training.
Six schools were selected by the Egyptian Government to participate in the demonstration project, of which, three of the schools were allocated to HP. The three schools allocated to the HP Consortium are, El Moqta Secondary Mixed School in Dakahlia, Omar Ibn Abd El Aziz (Mixed School)-, Elsalaa Secondary School in Sohag and Elhadin Secondary School in El Beheira.
The NEPAD e-Schools Project was first publicly announced at the 2003 Africa Economic Summit in Durban, South Africa. The scope of the project focuses on providing an end-to-end education solution that will utilize Information and Communication Technology (ICT) to connect schools to the NEPAD e-schools network and the Internet. In addition to connectivity, solutions will provide content and learning material, as well as establish health points at schools in support of the NEPAD e-Health Programme.
The strategy is to turn all African high schools and primary schools into NEPAD e-Schools within ten years of implementation. Upon completion of the project, more than 600 000 schools across the continent will enjoy the benefits of ICT and connectivity to the NEPAD e-School network and the Internet.
Partners to the HP e-Schools consortium include the HP i-Community team; HP Channel Partners; EduPac; EduTouch; Mindset; Transtel; Eskom; Computers for Kids; Multichoice Africa; Smart Technologies and Canonical.
A number of private companies, including the HP consortium, have committed to sponsoring the demonstration project for a period of 12 to 18 months in 16 participating countries. Participating countries are: Algeria, Burkina Faso, Cameroon, Egypt, Gabon, Ghana, Kenya, Lesotho, Mali, Mauritius, Mozambique, Nigeria, Rwanda, Senegal, South Africa and Uganda.
The e-schools project falls under the auspices of the e-Africa commission, the NEPAD ICT Task Team responsible for developing the NEPAD ICT programme and implementing related projects.
AFK Sistema Plans to Participate in GSM Tender in Egypt Source: Prime-Tass Business News Agency, February 16, 2006
Major Russian holding AFK Sistema (link here) plans to participate in a tender for a GSM license in Egypt, Sistema's President Vladimir Yevtushenkov said.
Yevtushenkov said that operations in the country have a good outlook as Egyptians prosperity is expected to grow and the average age in the country is 27 years.
It is not clear yet how Sistema will participate in it, whether it be through its telecommunication assets managing company Sistema Telecom, or through its subsidiary Mobile TeleSystems (MTS) (link here) .
Kuwait's MTC (link here) , UAE's Etisalat (link here) , Telecom Egypt (link here) and an alliance between Egypt's Raya Holding (AmCham Member) (link here) and the Republic of South Africa's MTN Group (link here) are also expected to participate in the tender.
Mobile penetration in Egypt, which has a population of about 80 million people, stands at 15%.The subscriber base of Russia's largest mobile operator Mobile TeleSystems(MTS) stood at 61.687 million people as of January 31, Advanced Communications & Media (AC&M) said. MTS operates in Russia, Belarus, Ukraine, Uzbekistan and Turkmenistan.
World Bank to Fund 700MW Egyptian Power Project Source: Trade Arabia, February 18, 2006
The World Bank (WB) (link here) has approved the setting up of a700 MW power plant n Egypt at an estimated cost of $260 million. The Bank will finance the El-Tebbin power project by issuing a fixed spread loan (FSL) to the Egyptian government with a 20-year maturity, including a five-year grace period.
The loan will be issued by the International Bank for Reconstruction and Development (IBRD), an arm of the World Bank Group. Through the El-Tebbin power project, the WB is aiming to support the Egyptian government's effort in providing sustainable energy to the country.
The project will comprise two units of 350 MW steam turbines and boilers using natural gas as fuel. The project is expected to generate considerable employment opportunities both during the construction phase and during the operation period.
The Bank hopes that the project will contribute to the development of the legal framework for the Egyptian power sector, future gas and electricity pricing, and further the implementation of already undertaken reforms, said the report.
Petrochemicals Masterplan on Track Source: Middle East Economic Digest, February 24, 2006
Phase 1 of Cairo’s petrochemicals masterplan is on track to be completed by 2009 and preparation work is under way for the plan’s second phase, Osama Kamal, vice-chairman for planning and projects at Egyptian Petrochemicals Holding Company (ECHEM) (AmCham Member) (link here), told the MEED Natural Gas conference held in Cairo on 21-22 February.
According to Kamal, implementation of phase 1 will – at $4,600 million – cost significantly more than the originally planned $3,500 million as a result of higher material and equipment prices.
The first of the masterplan’s three phases covers the construction of eight petrochemical plants, producing methanol, ammonia and urea, propylene and polypropylene (PP), polystyrene, PVC, linear alkyl benzene (LAB), acrylic fibre and olefins including polyethylene (PE).
Kamal said that phase 2 of the masterplan was now under preparation. The next phase, to be carried out from 2009-15 at a cost of at least $3,300 million, will see the addition of styrene monomer and styrene butadiene, polyester, aromatics, purified terephthalic acid (PTA) and ethoxylates as well as further olefins and methanol units.
Under phase 3, to be implemented from 2016-22 and also valued at about $3,300 million, ECHEM plans to set up vinyls, propylene and PP, styrenic, styrene butadiene and detergents complexes as well as a third olefins unit. ECHEM also plans to set up trading and marketing companies, a utilities firm and a petrochemicals investment vehicle.
Bids Studied for North Idku Platform Source: Middle East Economic Digest, February 24, 2006
Technical and commercial bids are under evaluation at Germany’s RWE Dea (AmCham Member) (link here) for a feasibility study contract covering the fabrication and installation of an unmanned platform and related facilities at the offshore North Idku gas field.
The bidders include: a team of Australia’s WorleyParsons (link here), with Houston-based Intec Engineering (link here); Genesis Oil & Gas Consultants (link here), a wholly-owned subsidiary of Paris-based Technip (link here); and the US’ Kellogg Brown & Root (KBR) (link here).
The scope of work includes an unmanned platform – with an option for a second platform – two subsea wells, an in-field pipeline and a 60-kilometre-long gas export line from the new production facilities to the onshore processing plant at Mediah. It also entails modifications to an existing platform at north Abu Qir and the Mediah gas-processing unit. A contract award is due by late March.The next stage in the project implementation will be the issue of a tender for the front-end engineering and design (FEED) package, which is due to be released by the second quarter. Aberdeen-based Avanteq has already carried out a conceptual study for development of the gas field. RWE Dea is the operator of the North Idku concession under an exploration license granted by Egyptian Natural Gas Holding Company (EGAS) (link here).
Two Oil Finds in Suez Gulf and Western Desert Source: Egypt State Information Service, February 15, 2006
Two oil finds were announced Tuesday in Egypt's Western Desert and Suez Gulf with a total reserve of 16m barrels and an output of 10,000 barrels per day (bpd).
The first find is off-shore in the Gulf of Suez, 7km to the northwest of the South Sinai city of El-Tur at a depth of 133 feet.
A report handed to Minister of Petroleum Sameh Fahmy by the Gulf of Suez Petroleum Company (Gupco) indicated that drilling operation started last December.
The report estimated reserve, according to preliminary results, at 10 million barrels. Daily production is put at 5,000 bpd.
Fahmy also received a report on a new find 170km to the southeast of Matrouh in the Western Desert.
According to the report, proven reserves are estimated at 6 million barrels, 5,000 bpd. It is the second find in this area since 1985.
Sokhna Soaks Up Bunkering Bids Source: Middle East Economic Digest, February 24, 2006
The local Sokhna Bunkering Company (Sonker) is evaluating technical and commercial bids for a combined conceptual study and front-end engineering and design (FEED) contract involving the construction of a major new bunkering facility at Sokhna port (link here).
Bidders for the four-month contract include Australia’s WorleyParsons (link here), Tebodin Middle East, part of Tebodin (link here)of the Netherlands, and the UK’s Scott Wilson (link here). An award is due by late March.
Estimated to cost $200 million-250 million, the project will entail the construction of: a bunkering terminal; a tank farm with total capacity of 155,000 cubic meters; a jetty; and associated marine works. The centerpiece of the proposed development will be the tank farm. It will call for the construction of: five tanks, each with capacity of 25,000 cubic meters, for the storage of bunker fuel; a 10,000-cubic-metre tank for diesel; and three tanks, with total capacity of 20,000 cubic meters, for mixed products.
A tender for the engineering, procurement and construction (EPC) contract is due to be issued by the third quarter. The facilities will take 18-22 months to complete. Egypt has capacity to store 2 million tons a year of bunker fuel. The terminal, which will be located in the Sokhna Port free zone south of Suez, will at a later stage also cater for imports of edible oils, liquid chemicals and petrochemicals. In early 2004, Sonker signed an agreement with Vopak-Horizon Fujairah (link here), a joint venture of Vopak (link here)of the Netherlands and Horizon Terminals Limited, a subsidiary of Emirates National Oil Company (link here)of the UAE, to set up the terminal and export facilities.
Egypt and Turkey Establish Gas Company Source: Mena Report, February 23, 2006
Egypt and Turkey have recently agreed to jointly establish the "TIR GAZ" company. This company will be responsible for exporting Egyptian gas to Europe via a pipeline, which will go from Egypt to Jordan, and then through Syria to Turkey. This recent deal raises again the discussion concerning Egypt's natural gas export destinations.
Centurion Energy Bids on Egyptian Assets Source: The Calgary Herald, February 23, 2006
Centurion Energy International Inc. (link here) is offering $225 million for a private U.S. energy company, to bulk up its operations in Egypt.
If successful, the buy will boost Centurion's Egyptian land position by about 10%, while adding production of roughly 8,200 barrels of oil equivalent a day.
Calgary-based Centurion's output currently stands at 38,000 boe/d, nearly all of it from two natural gas fields in northern Egypt.
In a release, Centurion said the new properties are located near its existing lands in the Nile Delta, moving it closer to becoming an eventual player in Egypt’s growing liquefied natural gas industry.
Beyond that brief rationale, company officials were traveling and not available for further comment.
The deal puts Centurion in line to increase its holdings in Egypt by 653,000net acres, most of which is nearby its existing operations.
Along with those assets, the unidentified company that Centurion hopes to buy has about 2,600 boe/d of production in Texas. The deal is slated to close by April 30, but could be derailed by a higher offer.
The Cashier of the Egyptian Holding Company for Natural Gas has issued on February 15, 2006 a request of offers & proposals to participate in the international auction for oil & gas exploration & exploitation concessions in 12 different zones in Nile Delta, North Sinai onshore areas & the Mediterranean. Deadline for the submission of offers is July 16, 2006.
Electromechanical Works
The Cashier of Egyptian Public Authority for Drainage Projects for East Delta Drainage in Ismailiya, has issued on February 17, 2006 a request of offers from eligible bidders for the construction of subsurface [ tile ] drainage networks in the catchment area of Abu Sweer in Ismailiya Governorate serving 3,900 feddans land under funding from World Bank. The specification fee is LE700. The Bid Bond is LE85,000. Deadline for the submission of offers is April 3, 2006.
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