By Mohammed Ayyad and Moustafa fahmy
The government will increase to EGP 400m the capital of a fund created to support and operate stalled factories, to be launched before the end of this year, according to Hani Sarie-Eldin a legal adviser for the fund.
Sarie-Eldin said the increase will be decided on during a meeting between the Ministry of Industry and Foreign Trade, Ayadi Holding Company for Investment and Development, the National Investment Bank and the Industrial Modernization Center (IMC), on Thursday.
Chairman of Ayadi Company Osama Saleh said the company’s board agreed to participate in the capital of the fund. The value will be determined during Thursday’s meeting with the concerned authorities.
Minister of Industry and Foreign Trade Tarek Qabil had announced this month the establishment of a fund to support stalled factories with a capital of EGP 150m. The fund will work on financing stalled factories to put an end to losses.
Sarie-Eldin anticipates that the fund’s capital will exceed EGP 400m over the next year, especially in light of the attention of several parties and their willingness to contribute to the fund.
The Ministry of Industry recently agreed with IMC and the Ministry of Planning, represented by the National Investment Bank, to contribute to the initial capital of the fund in equal shares among the three parties. The Ministry of Industry will contribute a share in the fund’s capital through its allocations in the state budget.
Daily News Egypt had revealed last month the government’s intention to launch an investment fund to finance stalled factories, financed by the Long Live Egypt Fund, a government bank and Ayadi. The fund’s capital is expected to increase to EGP 500m in the first stage after an agreement between all sides.
In previous statements, Qabil said the ministry is negotiating with several other parties to contribute to the fund in order to increase its capital. He did not rule out the contribution of the Long Live Egypt Fund in the financing.
The number of stalled factories, according to latest figures by the Administrative Control Authority, is about 1,600 factories, while IMC figures put them at about 900 factories, among which only 170 factories can be re-operated.
Many cases of stalled factories go back to administrative problems, while a number of them were affected by the recession in the market and the increase in production costs.