CAIRO: The board of Egypt s Mobinil will issue fixed-rate, unsecured 5-year bonds worth up to LE 1.5 billion ($275 million) after receiving shareholder approval on Thursday, executives said. The final interest rate has not been set, Chief Finance Officer Khalid Ellaicy told Reuters. It should be within, let s say, a couple of weeks, he added. It will be an attractive interest rate, because we are marketing this not to the commercial banks. It is marketed to financial institutions, funds operating in Egypt who have a relatively higher cost of funds, he added. The bonds will be denominated in Egyptian pounds and listed and marketed in Egypt, but would not exclude foreigners. Chief Executive Officer Hassan Kabbani said he hoped the issue would be traded on the secondary market. That depends on liquidity, of course, he said. The central bank has blocked Mobinil, which holds the largest share of Egypt s mobile market, with almost 25 million subscribers, from accessing bank lending as it considers it part of one of its major shareholders, Orascom Telecom. Under Egyptian banking laws, banks are allowed to lend only a certain portion of their total loans to any one client. Funds raised through the issue will be used to finance a number of licensing payments due in 2010 and upgrades to infrastructure, as well as the potential purchase of internet firm LinkDotNet from Orascom, Mobinil said.
