The escalation of the conflict in Lebanon has greatly affected the local market, as it fluctuated up and down in sync with the latest developments in tensions. In fact, the CASE 30 opened last week with one of its lowest one-day declines; and closed the week ending 20 July with a 3.52 per cent drop. Nonetheless, there was some good news as institutional investors bought heavily in the market, especially on the last trading day amid a selling spree by individuals. The overall transactions amounted to LE3.5 billion. EFG-HERMES: Egypt's leading investment bank took the market by surprise by announcing that the UAE- based Abraaj Capital submitted a request to acquire a stake in the company, through a 33 per cent capital increase. Abraaj is one of the leading asset management firms in the region with a strong presence in North Africa and the Gulf countries, and focuses on private equity buyouts. The deal is worth LE2.875 billion and includes issuing 97.1 million new shares at LE30 per share. Based on the current number of shares of 291,222,030, the capital increase could dilute the stakes of current shareholders by 25 per cent. The offer is pending the approval of shareholders, the General Assembly and relevant authorities. On another note, EFG issued a press release highlighting its stake in the Lebanese Ouda Bank, to calm concerns about the effect of violence in Lebanon on its investment in the bank. The release noted that 89 per cent of the stake is paid in US dollars, and that 70 per cent of its deposits are in foreign currencies -- which mean that it is hedged against the retreat in the Lebanese Lira. The bank contributes to EFG-Hermes's total revenues by 12 per cent and has posted a 100 per cent increase in net profits during the first quarter of 2006. It operates in Lebanon, Egypt, Jordan, Syria, and Switzerland. ORASCOM TELECOM: The regional GSM operator has signed an agreement with Citigroup in which the latter will arrange a syndicated loan of $2.5 billion to finance OT expansionary plans, especially increasing its stake in Hutchinson to 22 per cent. A number of local and international banks expressed their interest in contributing to the loan, which is considered OT's largest bank loan so far. The loan's maturity is expected to be seven years, in line with OT's plan to replace its short-term liabilities with longer ones. OT has just acquired a $270 million loan from a consortium, including 16 banks led by the National Bank of Egypt and CIB. In a related note, OT's chairman and founder Naguib Sawiris said he is interested in buying TIM Hellas Telecommunications of Greece. Sawiris held talks with the owners of the company, including Apax Partners Worldwide, about buying the company by next year. Apax and Texas Pacific Group bought TIM Hellas from Telecom Italia in April 2005. OMAR EFFENDI: The fate of Egypt's largest retail store is still unknown with a new investor offering to buy it for LE2 billion, double the value of the bid made by the Saudi Anwal group. The Jeddah-based El-Said Contracting group has not yet submitted a letter of credit to prove the seriousness of its offer, and the Holding Company has given it until 1 September to submit a bid. In early July, the Saudi group -- owned by an Egyptian expatriate -- sent an offer to the Holding Company for Trade to buy Omar Effendi, pay the price of three trenches, keep the retailer's 6,000 employees, in addition to pumping new investments into the company. Omar Effendi was offered for sale four times in as many years, but the bids received were always too low. The highest offer came from the Saudi Anwal group six month ago, but it caused a stir because it was revealed as much less than the company's fair value. ARAB COTTON GINNING COMPANY: The company's Employee Shareholder Association (ESA) decided to repay the LE37 million in loans it acquired from the company, in order to subscribe in its last capital increase. The ESA is prohibited from selling its holdings in the company unless it repays the loan. The trading on shares started last week, with company shares recording a 6.8 per cent increase amid rumours that new investors are considering buying a stake in ACGC. Compiled by Sherine Abdel-Razek
