A decision by the Egyptian public prosecution to freeze a major agricultural deal from the Saudi Arabian group Kingdom Holding has put in stark relief the political risks of investing in the country after the revolution in which its president Hosni Mubarak was ousted.
The deal involved the 1998 purchase of 100,000 feddans (42,000 hectares) of land in the Toshka area of Egypt that Kingdom Agricultural Development Company (Kadco) said would be developed into a vast agricultural project.
The first two phases would involve investments of 650 million Egyptian pounds (Dh401.5m), the company said in 2007. It did not disclose the amount it paid for the land.
On Sunday evening, a spokesman for the Egyptian public prosecutor said the deal had been frozen because investigations showed "the contract contained unknown provisions that violated the law and gave the company unjustified benefits".
The size of the land involved in the deal was double the legal maximum for a sale of government land in the district and improperly exempted Kadco from taxes and fees, the spokesman alleged after the government announced it had frozen the assets of the former agriculture minister Youssef Wali.
Kingdom, an investment company controlled by the Saudi billionaire Prince Alwaleed bin Talal bin Abdulaziz Al Saud, did not respond to requests for comment yesterday.
Despite the risks, some of the region's top investment companies said they were bullish on the future of the Egyptian economy.
Deals done with ministers and politicians connected to the Mubarak regime are under close scrutiny and several top businessmen have been arrested on allegations of corruption, but the country's economic basis is still sound, they said.
Mustafa Abdel-Wadood, the chief executive of Abraaj Capital, the investment arm of the biggest buyout firm in the Middle East, said Egypt remained a vital investment target for the company, without commenting directly on Kingdom Holding's frozen deal.
"The situation is fluid at the moment and you have to take that into account, but Egypt is a large economy and we will continue to invest in the country," Mr Abdel-Wadood said.
Abraaj Capital is one of the largest foreign investors in Egypt, and in 2007 closed the largest private equity transaction in the history of the Mena region when it acquired 100 per cent of Egyptian Fertilizers for US$1.41 billion (Dh5.17bn).
It has raised almost $7.2bn and distributed almost $3bn to investors. Assets under management from its seven funds stood at $6.2bn at the end of last year.
Mr Abdel-Wadood, who was the UAE chief executive of the Egyptian investment bank EFG-Hermes before Abraaj, said there were "absolutely" deals in the pipeline in the Middle East and North Africa.
"The investment pipeline is extremely strong. We have to look at the current situation but we will proceed on a deal-by-deal basis," he said in Dubai yesterday, announcing the completion of Abraaj Capital's 49 per cent acquisition of Network International, a credit and debt card provider.
"Despite turbulent times and the slightly fluid moment for the region we think it's exactly the right time to invest in growth in the region."
The "Arab Spring" is creating an opportunistic moment for investors, said Karim Souaid, the managing partner of the private equity company GrowthGate Capital, registered in Bahrain, that counts Gulf investors among its top sources of funds.
"There is no better time for a private equity firm to invest in Egypt than now," Mr Souaid said.
"With the announced reforms, including elections and an anti-corruption drive, and the implementation of due process of law, the investment environment has taken gigantic leaps, be it for regional or foreign investors."
The "crony capitalism" that was rife under the previous regime was a disincentive for investors in previous years, despite the powerful economic driving force of the demographics of Egypt, Mr Souaid said, adding the country had a large and growing population and urgent needs for infrastructure and growth.
"Despite the current slowdown in tourism revenues, Egypt will stay the course with the increase in oil and gas prices, agriculture and domestic manufacturing cushioning the adverse effects of the recent turmoil," he said.
bhope@thenational.ae
COMPANY%20PROFILE
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What is graphene?
Graphene is extracted from graphite and is made up of pure carbon.
It is 200 times more resistant than steel and five times lighter than aluminum.
It conducts electricity better than any other material at room temperature.
It is thought that graphene could boost the useful life of batteries by 10 per cent.
Graphene can also detect cancer cells in the early stages of the disease.
The material was first discovered when Andre Geim and Konstantin Novoselov were 'playing' with graphite at the University of Manchester in 2004.
BEETLEJUICE BEETLEJUICE
Starring: Winona Ryder, Michael Keaton, Jenny Ortega
Director: Tim Burton
Rating: 3/5
The%20specs%3A%202024%20Mercedes%20E200
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Company profile
Name: Steppi
Founders: Joe Franklin and Milos Savic
Launched: February 2020
Size: 10,000 users by the end of July and a goal of 200,000 users by the end of the year
Employees: Five
Based: Jumeirah Lakes Towers, Dubai
Financing stage: Two seed rounds – the first sourced from angel investors and the founders' personal savings
Second round raised Dh720,000 from silent investors in June this year
SPECS
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SPECS
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UAE currency: the story behind the money in your pockets
COMPANY%20PROFILE%20
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The Byblos iftar in numbers
29 or 30 days – the number of iftar services held during the holy month
50 staff members required to prepare an iftar
200 to 350 the number of people served iftar nightly
160 litres of the traditional Ramadan drink, jalab, is served in total
500 litres of soup is served during the holy month
200 kilograms of meat is used for various dishes
350 kilograms of onion is used in dishes
5 minutes – the average time that staff have to eat
Company%20Profile
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Traits of Chinese zodiac animals
Tiger:independent, successful, volatile
Rat:witty, creative, charming
Ox:diligent, perseverent, conservative
Rabbit:gracious, considerate, sensitive
Dragon:prosperous, brave, rash
Snake:calm, thoughtful, stubborn
Horse:faithful, energetic, carefree
Sheep:easy-going, peacemaker, curious
Monkey:family-orientated, clever, playful
Rooster:honest, confident, pompous
Dog:loyal, kind, perfectionist
Boar:loving, tolerant, indulgent
Dubai Rugby Sevens
November 30-December 2, at The Sevens, Dubai
Gulf Under 19
Pool A – Abu Dhabi Harlequins, Jumeirah College Tigers, Dubai English Speaking School 1, Gems World Academy
Pool B – British School Al Khubairat, Bahrain Colts, Jumeirah College Lions, Dubai English Speaking School 2
Pool C - Dubai College A, Dubai Sharks, Jumeirah English Speaking School, Al Yasmina
Pool D – Dubai Exiles, Dubai Hurricanes, Al Ain Amblers, Deira International School
Company%20Profile
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How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Dubai works towards better air quality by 2021
Dubai is on a mission to record good air quality for 90 per cent of the year – up from 86 per cent annually today – by 2021.
The municipality plans to have seven mobile air-monitoring stations by 2020 to capture more accurate data in hourly and daily trends of pollution.
These will be on the Palm Jumeirah, Al Qusais, Muhaisnah, Rashidiyah, Al Wasl, Al Quoz and Dubai Investment Park.
“It will allow real-time responding for emergency cases,” said Khaldoon Al Daraji, first environment safety officer at the municipality.
“We’re in a good position except for the cases that are out of our hands, such as sandstorms.
“Sandstorms are our main concern because the UAE is just a receiver.
“The hotspots are Iran, Saudi Arabia and southern Iraq, but we’re working hard with the region to reduce the cycle of sandstorm generation.”
Mr Al Daraji said monitoring as it stood covered 47 per cent of Dubai.
There are 12 fixed stations in the emirate, but Dubai also receives information from monitors belonging to other entities.
“There are 25 stations in total,” Mr Al Daraji said.
“We added new technology and equipment used for the first time for the detection of heavy metals.
“A hundred parameters can be detected but we want to expand it to make sure that the data captured can allow a baseline study in some areas to ensure they are well positioned.”
Company Profile
Name: Thndr
Started: 2019
Co-founders: Ahmad Hammouda and Seif Amr
Sector: FinTech
Headquarters: Egypt
UAE base: Hub71, Abu Dhabi
Current number of staff: More than 150
Funds raised: $22 million
The%20specs
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Specs%3A%202024%20McLaren%20Artura%20Spider
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%203.0-litre%20twin-turbo%20V6%20and%20electric%20motor%3Cbr%3E%3Cstrong%3EMax%20power%3A%3C%2Fstrong%3E%20700hp%20at%207%2C500rpm%3Cbr%3E%3Cstrong%3EMax%20torque%3A%3C%2Fstrong%3E%20720Nm%20at%202%2C250rpm%3Cbr%3E%3Cstrong%3ETransmission%3A%3C%2Fstrong%3E%20Eight-speed%20dual-clutch%20auto%3Cbr%3E%3Cstrong%3E0-100km%2Fh%3A%3C%2Fstrong%3E%203.0sec%3Cbr%3E%3Cstrong%3ETop%20speed%3A%20%3C%2Fstrong%3E330kph%3Cbr%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20From%20Dh1.14%20million%20(%24311%2C000)%3Cbr%3E%3Cstrong%3EOn%20sale%3A%3C%2Fstrong%3E%20Now%3C%2Fp%3E%0A
Blackpink World Tour [Born Pink] In Cinemas
Starring: Rose, Jisoo, Jennie, Lisa
Directors: Min Geun, Oh Yoon-Dong
Rating: 3/5