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Doubts raised over Kellogg’s bid for BiscoMisr shares - Daily News Egypt

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Doubts raised over Kellogg’s bid for BiscoMisr shares

Kellogg’s EGP 940m bid for 51% of company awaiting response from Financial Supervisory Authority

Bisco MisrThe Egyptian Center for Integrity and Transparency has raised doubts over Kellogg’s EGP 940m bid to buy 51% of BiscoMisr shares, according to the centre’s head, Shehata Mohamed Shehata.

Shehata said the centre, which has issued a report on the offer, has raised concerns over the US-based foods company’s dealings with Israeli businessmen and its use of genetically modified (GM) products.

He said the company is “waiting to see the government’s response to this company”, via the Egyptian Financial Supervisory Authority, and suggested that the government and investors offer public subscriptions. Shehata added that if EGP 64bn was raised in eight days [for the Suez Canal Project], Egyptians can raise EGP 900m to protect their health and food which is being manufactured using GM materials.

Previously, Kellogg’s offered a bid to buy 51% of BiscoMisr shares to the Egyptian Financial Supervisory Authority worth more than EGP 940m.

Last year, Kellogg’s sales accounted for $14.8bn, while its investments internationally reached $1.3bn, according to the company’s Vice President of Central and Eastern Europe, the Middle East, and North Africa Amr Farghal.

The number of employees working in the company amounts to 30,000, Farghal said.

Last Sunday, the company held a press conference to respond to concerns regarding its buying 51% of BiscoMisr shares.

One of the workers participating in the conference, held by the centre on Monday in the Egyptian Journalists Syndicate, said they are concerned about what will happen to BiscoMisr workers after Kellogg’s buys the shares.

Last Sunday, Amr Farghal stated that the company is not planning to lay off any employees in accordance with the law.

The law states that the investor is prohibited from laying off any employees from the company during the first year of investment.

Salwa El-Antary, Former Head of the Economic Research Division at the National Bank of Egypt, said the current issue raises concerns regarding a sabotage of the national industry.

El-Antary added that BiscoMisr has land assets in addition to its investments in the food sector, while the bids did not specify how Kellogg’s will handle these assets.

She also questioned whether Kellogg’s would keep on employees beyond one year of investments.

According to El-Antary, some companies offered to buy 51% of BiscoMisr shares through loans from Egyptian banks. This is regarded as a foreign investment with Egyptian money, contrary to a straightforward foreign investment.

According to one Kellogg’s partners, company sales during fiscal year (FY) 2013/14 was EGP 430bn. Cash liquidity for the company during FY 2013/14 reached EGP 64bn, according to one of the partners.

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