CAIRO: Egypt could reach a decision in weeks on the fate of operating licenses for two Ezz Steel plants and three licenses for other firms, the trade and industry minister said on Thursday.
The minister, Mahmoud Eisa, told the Reuters Middle East Investment Summit the government wants to make sure the companies pay fines imposed by a recent court ruling, but wants them to keep the operating licenses taken from them by the ruling because that scenario would best serve the companies, the state and the workers involved.
Shares in Ezz Steel, Egypt’s biggest steel producer, were hit by the September court ruling, in which its former chairman was jailed on graft charges and it was ordered to pay LE 660 million ($111 million) and lose the licenses.
"We haven’t cancelled these licenses yet until we finish all these negotiations with them, which are still running," Eisa told the Reuters Middle East Investment Summit.
Asked about the timing of a decision, he said: "Maybe (in) several weeks, we will have a final decision."
Eisa said the goal was to find a solution that would mean the firms retained the licenses, although if no agreement was reached, they would be scrapped.
"We don’t want to reach this because we will be all losers. The company will be one of the losers. The government will be a loser because it is a big investment. We want to keep the workers of all these projects," he said.
"The common benefit for all parties is to keep these licenses, to comply with the court decision and this is what we are targeting. I think we will reach this position," he said.
Discussions included possibly arranging payments of fines or other costs over periods. Another was negotiating terms related to energy supplies the licenses required, he said.
"We are working to make it easier to conform with the decision with less financial impact," he said.
Analysts have said the withdrawal of the licenses from Ezz Steel affected valuations because the projects they related to were part of a vertical integration plan. Ezz Steel had begun work on one related project, a Direct Reduced Iron plant.
Ezz officials could not immediately be reached for comment.
In September, the firm said the license withdrawal would not affect current operations but would hit future investments. It also said former chairman Ahmed Ezz, who had held a top post in ousted President Hosni Mubarak’s party, would appeal his sentence after he was jailed for 10 years.
The court had ruled on five licenses, two related to Ezz Steel and the others related to three other firms.
