CAIRO: Egypt’s Arabiyya Lel Estithmaraat investment firm said on Sunday it agreed to pay LE 320 million ($55.4 million) for a majority stake in the historic Omar Effendi department store chain.
Egypt had sold the chain to Saudi Arabia’s Anwal for LE 589.5 million in 2006. The sale attracted public attention in Egypt, where the media have repeatedly accused the state of selling its assets too cheaply.
Arabiyya announced the deal on Thursday, but had declined to say what it had agreed to pay for the 85 percent stake. The firm’s shares, which soared 9.6 percent after the announcement, were trading up 3 percent by 11:29 am (CLT) on Sunday.
An Egyptian member of parliament had asked Egypt’s general prosecutor to stop the sale, saying the state’s deal with Anwal restricted the resale of the chain’s assets, Egypt’s state news website egynews.net reported on Sunday.
Arabiyya Chairman Mohamed Metwalli told Reuters the Anwal deal "has constraints on the sale of the chain’s assets but there are no constraints on the sale of the whole chain".
Arabiyya Lel Estithmaraat, which specializes in financing infrastructure, real estate and industrial projects, has said it plans to update the chain, which operates about 80 stores throughout Egypt.
Buoyant consumer demand has helped the most populous Arab country sustain economic growth rates of around 5 percent despite the global financial crisis.
Omar Effendi was founded in 1856 as Orosdi Back and has long dominated Egypt’s retail sector. It changed hands and acquired its current name in the 1920s before being nationalized in 1957.
An Egyptian state-owned firm holds 10 percent of the shares, while the remaining 5 percent is owned by the World Bank.
Omar Effendi does not disclose financial results.
–Additional reporting and writing by Yasmine Saleh.
