CAIRO - The new owner of Egypt's iconic Omar Effendi retail chain may lease some branches while keeping their labour, sources told a local newspaper on Sunday. Egyptian business daily newspaper Al-Mal said the actual value of the country's mega store was LE855 million ($147.7 million), of which Anwal got LE185 million. The remainder, LE670 million, would cover the retail chain's debts, the newspaper said, citing the buyer's financial advisor KBR. "El-Aseel has a full-fledged strategy to develop the store in a bid to improve its financial position and turn it into a profitable firm. Therefore, El-Aseel will pump LE200 million into the store in 2011 without borrowing from banks," a source at BKR told Al-Mal. El-Aseel said it would rely on Omar Effendi's operating revenues to cover its losses, which are estimated at LE500 million. The source, whose name wasn't given by the newspaper, added that El-Aseel revealed details of a deal made by a consortium ledwould also restructure the mega store's debts. The debts include LE400 million for banks and LE270 million for tax authorities and suppliers. On Thusrday, an Egyptian-Kuwaiti-Qatari consortium led by El-Aseel Company, owned by Egyptian businessman Yassin Aglan bought an 85 per cent stake in Omar Effendi from Saudi Anwal. After more than 45 days of negotiations, Aglan agreed to pay all the mega store's debts in addition to LE185 million to Anwal. "After Arabiyya Lel Estithmaraat said it wouldn't complete the deal, Anwal studied three other bids. Anwal picked El-Aseel as a suitor for the deal as it offered the highest bid," Tareq Abdel Aziz, a legal advisor to both Anwal and El-Aseel. In October, Egypt's Arabiyya Lel Estithmaraat said it agreed to buy an 85 per cent stake in the historic store chain. The Egyptian Government sold the department store to Saudi Anwal in 2006 for LE589.5 million. The Egyptian media has repeatedly accused the government of selling national assets too cheaply. The store was founded in 1856 as Orosdi Back and has long dominated the retail sector. It changed hands and acquired its current name in the 1920s before being nationalised in 1957. Other stakeholders inculde an Egyptian State-owned firm holding 10 per cent of the shares and the remaining five per cent is owned by the World Bank.
