Management of the Egyptian Media Production City will be market-oriented so that the company can secure sufficient liquidity for upgrading and achieving proper returns on investment, says Chairman and Managing Director of the MPC Sayed Helmi. He points to the main features of a study conducted by KPMG Hazem Hassan Public Accountants & Consultants in cooperation with a US consultancy firm.
Helmi said on Wednesday that the study recommends that the company should sell off non-media production businesses such as its Magic Land theme park to an anchor investor or sell part of unused land space to secure cash flows.
Consultants also suggest that the company create a separate operation to run its cinema production activities through partnership with other investors and to complete its development scheme estimated at LE 100 million.
However, Helmi rules out that his company may apply for loans to get out of its liquidity crunch, as it is already suffering from large debts estimated at LE 175 million from the National Bank of Egypt, of which it has only paid LE 75 million. “Loans are the worst way for financing activities, for they add financial burdens that eat up profits, he argues.
Rather, the company submitted a proposal to its major shareholders – the Radio and TV Union, the National Bank of Egypt and Banque Du Caire – for a capital increase of 20 percent or LE 300 million, but has yet to receive any reply. Helmi says that shareholders will most probably refuse the proposal as they have not received any return on their existing investments.