The government's intervention to deal with Talaat Mustafa Group's Madinaty Project has levelled the market off during the previous week that witnessed a 2.9 per cent increase in its main index EGX30. However, it lost some ground on the first two days of the week amid talks that its bellwether, Orascom Telecom Holding might be subjected to more back taxes. ORASCOM TELECOM HOLDING (OTH): The Algerian government has denied imposing new taxes on the local unit of Egyptian mobile firm Orascom Telecom Holding (OTH), according to a news report aired by Al-Arabiya television citing unnamed government sources. This came after Algerian sources told Reuters that Algeria planned to demand new back taxes from the company, which was charged around $600 million in back taxes and fines last year. Algeria's central bank has also notified justice officials about a suspected false declaration by the director-general of the Algerian unit relating to its financial operations, the same sources told Reuters. "A decision has been taken to impose new back taxes on Djezzy. Notification will be received in the next few days. We are talking about several million dollars," said a source close to Algeria's telecoms industry. Orascom agreed to negotiate the sale of the unit, known as Djezzy, to Algiers after the state blocked a plan to sell it to South Africa's MTN. OTH's Chairman Naguib Sawiris has accused the Algerian authorities of pressuring Djezzy, but Algeria's telecommunications minister last week denied that and said his government was only upholding the law. Djezzy has been Orascom Telecom's biggest single source of revenue, but after months of wrangling the Egyptian firm agreed to talks on selling it to the Algerian government. Analysts have predicted a new battle over the sale price. OTH previously valued Djezzy at $7.8 billion, while the Algerian government has appointed a local accountancy firm to make a valuation. On another note, OTH was one of five firms submitting bids to buy 75 per cent of the Kosovo state-owned telecom company. Kosovo plans to conclude the sale of its telecom in December. Minister of Economy and Finance Ahmet Shala said that the government was hoping to get 500-600 million Euros from the sale. Kosovo telecom has around one million mobile and 100,000 landline customers. Kosovo, which declared independence from Serbia in 2008, has no country code and international calls go through Serbia and Slovenia. SIXTH OF OCTOBER FOR DEVELOPMENT AND INVESTMENT COMPANY (SODIC): The property developer agreed with the Bank of Alexandria to acquire LE350 million to speed up construction at its Allegria residential project. The firm raised LE550 million through rights issue in February and is planning for LE1.5 billion more of debt. A statement released by the company noted that accelerating work at the project would help it recognise "more of the LE4.2 billion in unit sales that it had contracted but had not yet shown up on its income statement." Real estate developers do not add sale revenues until they deliver houses to customers, which can take as much as five years after the contract is signed. It said its agreement with the Bank of Alexandria, a subsidiary of Italy's Intesa Sanpaolo, also included refinancing its existing LE85 million loan from the bank. This was not all for the company. SODIC submitted the only bid for 1.7 million meters in Sheikh Zayed City which was offered for sale by Urban Communities Development Authority in a sealed envelopes public sale. Besides SODIC, five other property developers withdraw the conditions documents but it was only SODIC that submitted a bid. EASTERN TOBACCO: The state-owned tobacco monopoly plans to inject LE700 million in investments during the current year to complete the company's new industrial complex in 6 October governorate. The overall investments directed to the complex mount to LE5.5 billion, financed through bank loans, financial leasing of machines and the company's own resources. The company completed 75 per cent of construction works and preparations of the complex and is targeted to start operations by the end of 2011. As for the company's current plant land in Giza, the company is studying some alternatives including selling it and using the liquidity in the company or entering a partnership with a real estate firm. The company's CEO Nabil Abdel-Aziz said it is seeking to secure its needs of tobacco by establishing safe stock through long-term contracts. This plan, according to what Abdel-Aziz told the local press, comes on the back of continuous shortage in global row tobacco and its escalating prices which drove international firms to make some acquisitions over tobacco production companies. Eastern is currently establishing a company to plant tobacco in Ethiopia. PALM HILLS DEVELOPMENT (PHD): The real estate developer's dispute with the state-owned Misr Aswan Tourism came to an end with the latter's shareholders agreeing to cancel the land sale contract between the two companies and returning a LE12.6 million to PHD within a month. President Hosni Mubarak issued a decree in June cancelling the sale contract for the land in the southern city of Aswan following a parliamentary debate about the price paid for it. The government was involved because the Egyptian state owns over 90 per cent of Misr Aswan Tourism, according to a state holding company's website. Compiled by Sherine Abdel-Razek
