The Holding Company for Cotton Spinning and Weaving has requested the Egyptian Natural Gas Holding Company (EGAS) to restructure its debts, according to Ahmad Mustafa, chairman of the company.
“Scheduling the debt will drive growth for the company during the current year, bringing it to 70%,” he added.
According to Mustafa, his company has a debt of about EGP 1bn for its natural gas consumption. The total losses of the company during the last fiscal year amounted to EGP 2.1bn, in comparison to EGP 1.8bn the previous year.
The company is one of eight holding companies under the Ministry of Investment, and has about 65,000 workers and 32 subsidiaries.
The company plans to apply for additional subsidies from the Ministry of Finance worth EGP 200m, an addition to the company’s earlier request for the same amount to purchase Egyptian cottons and yarn to prop up the company’s subsidiaries, according to Mustafa.
Farmers will be given subsidiaries of EGP 350 per qantar (45kg) supplied to subsidiaries.
Khaled Abdel Badie, chairman of the state-run EGAS, has stated that debts for companies in the business sector exceed EGP 3bn, and that there are some companies like the Holding Company for Spinning and Weaving which refuse to schedule payments for their debts.
While the total outstanding debt of subsidiaries of the Ministry of Investment to EGAS is recognised as EGP 3bn, an equal amount is also owed – yet remains unacknowledged – due to the increase of the price of gas from $3 to $4 per one million BTUS last year, according to Abdel Badie.
The Holding Company for Spinning and Weaving is still discussing how to restructure its debts with the national investment bank, according to Abdel Badie.
Investment Minister Ashraf Salman has stated that his ministry is targeting the development of holding companies affiliated with the ministry through the establishment of a sovereign fund, in preparation for the closure of the Ministry of Investment.