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Business recap: Government to pay-off LE 6 billion in public bank debt - Daily News Egypt

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Business recap: Government to pay-off LE 6 billion in public bank debt

CAIRO: The government announced Wednesday it has allocated LE 6 billion to its financial sector reform program for public banks, a joint Ministry of Investment (MOI), Ministry of Finance (MOF) and Central Bank statement released Wednesday said. The money will go toward paying off the banks debts, with LE 2 billion slated for The National …


CAIRO: The government announced Wednesday it has allocated LE 6 billion to its financial sector reform program for public banks, a joint Ministry of Investment (MOI), Ministry of Finance (MOF) and Central Bank statement released Wednesday said.

The money will go toward paying off the banks debts, with LE 2 billion slated for The National Bank of Egypt. The government has already paid off LE 6.9 billion in public company debt, all of which went to the Bank of Alexandria in preparation for its privatization last October. In the ongoing second phase of debt settlement, LE 9.2 billion is being allocated to the remaining three public banks, all coming from privatization proceeds, according to MOF.

Settling these companies debts is a huge part of the restructuring program, whether or not they are put up for sale, a senior MOI official told The Daily Star Egypt. The sum now being paid off to public banks, combined with the steady installments paid by some companies, is expected to bring public company debt down to about LE 10 billion, of which LE 7.8 billion are owed to public banks.

On another front, the government announced Banque du Caire will keep its trade mark and its legal status, independent of Misr Banque. The second and third largest state banks are expected to finalize their merger procedures within H1 2007, creating an institution with LE 136 billion in assets. When the merger was first announced in

October, 2005, MOF and the Central Bank said the new entity will fall completely under the control of Misr Banque in order to reduce the number of state-owned banks. MOF estimates the merger will cost the government about LE 11 billion.

Six banks lend Etisalat LE 1.5 billion

CAIRO: Etisalat Egypt Chairman Salah El Abduli reported Wednesday his company has secured LE 1.5 billion in loans from six Egyptian and UAE banks to finance the establishment of the company s mobile network infrastructure. Abduli said the loan ensures the company will stick to its scheduled start-up date by the end of February.

Since winning the country s third mobile license in July for LE 16.7 billion, the company has spent $258 million (LE 1.5 billion) to establish its operating infrastructure, part of the company s LE 6 billion budget for its first year.

Last week, El Abduli confirmed the company s successful completion of its first video call using 3G technology. He added trial operations will continue to improve call quality. Etisalat s agreement with the National Telecommunication Regulatory Authority and the two existing mobile operators allow it to lease the companies infrastructure for the first year until its own facilities are built.

Etisalat holds 55 percent in the consortium that won the government s auction of the third mobile license. The consortium includes the National Bank of Egypt (NBE) with 20 percent, Egypt Post with 20 percent and Commercial International with 4 percent.

Topics: FJP

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https://www.dailynewsegypt.com/2007/01/19/business-recap-government-to-pay-off-le-6-billion-in-public-bank-debt/
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