CAIRO: Olympic Group denied on Wednesday allegations that its 1997 purchase of Ideal Zanussi from the Egyptian government was undervalued.
“Before buying anything from the government, you have to submit a detailed request outlining how much you plan to invest in the company and what you plan to do with it,” said Saad Eldin Abdullah Sallam, chairman of Paradise Capital, the parent company of Olympic Group.
“Our request to them was very detailed; we ended up purchasing Ideal for LE 315 million, but we invested over LE 750 million in just five years time,” he said.
Sallam said Ideal’s worth at the time was estimated at between LE 130 million and LE 450 million, which the government announced publically.
Although Olympic bought Ideal years ago, Egypt’s January 25 Revolution, which forced Hosni Mubarak out of power and put many of his cronies under investigation for corruption and money laundering, caused the history of the transaction to resurface.
Sallam added that Olympic was not involved in the process of valuing the company, a matter that was left completely up to the government.
“We simply bought the company from the government who told us a price,” he added.
At a time when Olympic Group was seeking different ventures and opportunities to expand in the Egyptian market, the company made a “quick” decision to purchase Ideal.
“In 1995, we started thinking about venturing into other products such as refrigerators and washers different from what we usually produced, which was water heaters,” he said. “Ideal, which was a public share, was on sale at the time.”
“We saw our purchase of Ideal, which was already an established name in the Egyptian market at the time, as a shortcut,” said Sallam.
However, there were problems in the company’s file that Olympic Group did not find out about until recently.
“We bought the company because we thought we could really enhance this product, and serve the Egyptian market,” he said. “It turned out there were issues regarding the company that we did not know about until now.”
According to Niazi Abdullah Sallam, chairman of Delta Industrial Company (Ideal), corruption accusations published in state-owned Al-Ahram newspaper, which stated that the Sallam family was banned from travel and under investigation for the Ideal Zanussi deal, are “inaccurate and false.”
In response to these “false” allegations, he said the company’s business ethics before and after January 25 remained the same.
“These accusations may have started because Atef Ebeid is an acquaintance of mine,” said Niazi Abdullah Sallam.
Ebeid, who served as Egypt’s prime minister from 1999 to 2004, is currently under investigation for corruption allegations and illegitimate land deals.
“When we first entered Ideal in January 2008, it was in very poor condition,” he said. “I saw a look of hope and at the same time fear in the eyes of Ideal employees who were scared of how we’d treat them when we bought the company, but also hoping we’d offer them better salaries and working conditions.”
Today, he added, Ideal produces state-of-the-art appliances and has over 7,000 employees who enjoy “decent salaries and an exceptional working atmosphere.”
Moreover, American appliance Electrolux and Olympic Group are discussing a possible partnership.
“We are currently ready to sign a deal with Electrolux, but it is pending the security and stability of Egypt,” said Saad Eldin Abdullah Sallam.
He points out that the partnership would mean a lot for Egypt as it will make the country a focal point for distribution in the region and globally.
“Although we had a glorious revolution, this is a tough period that we all need to withstand,” he added. “We really need to start building Egypt.”
Olympic Group is also offering Ideal for sale to Electrolux for about LE 2 billion; the exact price and details of the transactions are under discussion.
Olympic has been operating in Egypt for 70 years. The company was the first in Egypt to introduce electric water heaters.
Today, they distribute a wide variety of appliances such as no-frost refrigerators, cookers, and heaters to the Middle East and North Africa Region, as well as to other parts of Africa.
