Developments in Tunisia and concerns about their repercussions on the North African country's future and on the investment risk in the region as a whole has overshadowed market transactions stripping its main index of more than five per cent in the first three sessions of the week. It is yet unclear if the market can hang on to its previous gains and stay over the 7,000 points index. Last week, the local investment bank Beltone Financial expected the local bourse to be among the best players in the region in 2011. Among a list of 12 companies that Beltone considered to be top picks as investment opportunities in the new year, there were three local companies, namely Telecom Egypt, Maridive and Oil Services and Juhayna Food Industries. On another level, the Ministry of Housing-affiliated New Urban Communities Authority (NUCA) will issue new five-year bonds with a total value of LE5 billion next month to finance infrastructure and other development. The price of the bonds as well as the coupon it will bear will be decided immediately before they are sold, at a margin over the after- tax yield on six-month treasury bills. NUCA sold LE10 billion in bonds last year in four separate tranches. ORASCOM TELECOM HOLDING (OTH): The fate of the company's deal with Russia's VimpelCom is still shaky despite the fact that VimpelCom's supervisory board gave on Monday their final approval to a revised bid for Naguib Sawiris's telecom assets. The Norwegian Telenor group, a major shareholder in VimpleCom, opposes the revised deal under which VimpelCom will issue 325.6 million new common shares and 305 million new preferred shares and pay $1.495 billion to Sawiris for 51.7 per cent of OTH and 100 per cent of Italy's Wind. It will also share any financial losses or gains with Sawiris related to a possible nationalisation of Orascom's Algerian arm Djezzy. The new bid came after Telenor opposed the initial deal at a December board meeting. According to Reuters, VimpelCom had originally planned to issue 325.6 million new common shares and pay $1.8 billion to Sawiris in a deal worth $6.6 billion. Sawiris approved the new deal giving up board representation rights. "We agreed to sacrifice our board representation rights to convince Telenor to support this transaction," Sawiris told CNBC news channel, adding that Wind had signed amended deal documents. Analysts say the Egyptian tycoon needs the deal as the countdown started for his maturing debt, totalling $3 billion for Orascom alone over the next three years. The Norwegian telecom operation is worried about the outlook for Djezzy which faces nationalisation, and the debt load of its mother company Wind. Telenor also objects to the structure of the share offer according to which Sawiris will acquire shares equivalent to 30.6 per cent of the voting rights in the enlarged group. Telenor's voting rights will be diluted from 36 per cent to 25 per cent. The company plans to use its pre- emptive right which gives the existing shareholders the right to buy any newly issued shares before offering it to new investors. The Norwegian firm is represented by just three of VimpelCom's nine board seats, but its veto could block any sale that requires a change to the shareholders' agreement. ORASCOM CONSTRUCTION INDUSTRIES (OCI): The regional construction, cement and fertilisers company formed a joint venture with the state-owned Arab Contractors to bid for nuclear power projects in Egypt and the Middle East. Egypt will issue a tender for its nuclear power plants in about two weeks' time and bidding companies will be given six months to present their offers. The first plant, to be located in Dabaa at the North Coast, will be the first of four plants that Egypt plans to build by 2025, with the first to start operating in 2019. Several countries in the region have announced their intentions to initiate nuclear power programmes to meet surging demand for electricity. Both companies are in negotiations with international nuclear technology providers to form a bidding consortium for this project. On another front, OCI is in talks with both the Commercial Bank of Egypt and National Société Générale Bank (NSGB) to get loan facilities of about LE1 billion to finance the 6 October sewage plant which OCI competes for via Spanish Group Aqualia consortium. EFG-HERMES HOLDING COMPANY: The leading investment bank acquired the stock market regulator's initial approval to form a direct investment fund specialised in investing in infrastructure projects. EFG-Hermes started procedures to collect the capital of the new fund, to be called Infra Egypt. EFG-Hermes has secured about 75 per cent of the fund's targeted capital which hit LE3 billion through deals with a number of local institutions concerned with infrastructure. EFG-Hermes plans to form another fund with the same name and specialisation but with investments denominated in dollars to be marketed among Arab and Gulf institutions. The period of the new fund will extend to 14 years while the investment period in its projects will last for five years. Compiled by Sherine Abdel-Razek
