Debts owed by Egyptian state-owned companies to local banks will be completely settled by the end of the 2006-07 fiscal year following the successful settlement of a LE 10 billion debt owed mostly to the Bank of Alexandria, said Mahmoud Mohieddin, the Minister of Investment, on Sunday.
“The settlement of about LE 20.5 billion of debts will improve the performance of state-owned companies, the Minister added, noting that general assemblies due to convene within eight weeks would show better indicators.
Mohieddin said the debts of the Egyptian Transport & Engineering Company amounted to LE 942 million. “Settlement of these debts will improve the finances of the company in view of its restructuring plan launched after the collapse of an acquisition deal a year ago, he added.
The Minister argued that the retreat of the company’s market share from 45 percent to 23 percent is a result of dumping practices by competitors who offered cheaper car tires produced China, India and Indonesia. “The company has obtained a ruling against dumping practices which resulted in sanctions until February 2007, Mohieddin said.
The restructuring plan depends on cutting costs by laying off about 1,700 workers at a cost of LE 108 million. Workers will be laid off according to the early retirement scheme. The Minister said that each worker would get LE 62,000 in compensation for early retirement, the highest amount offered under the public sector restructuring scheme.
The company will also sell off unused land, estimated at 105,000 square meters, to produce new capital investments to help fund operating costs. Mohieddin urged the company’s management to get expertise from an international partner over a period of three months. Noozz
