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Thursday, 21 November 2019

Egypt's government will not enter the steel market, says industry minister

Banks that have outstanding debts with steel makers who are refusing to pay for their licences will step in to protect their investments, says trade official

Ahram Online, Wednesday 21 Sep 2011
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Egypt's government will not enter into partnerships with steel makers whose new licences for new factories withdrawn by a court order last week, the minister of trade and industry said on Wednesday.

Mahmoud Eissa said that should steel makers refuse to pay the appropriate prices for these licences, banks who have outstanding debts with the firms will intervene and run the factories themselves to protect their investments. 
 
He added that Egyptian banks have around LE10 billion of exposure to steel makers due to the licences.
 
Last week, an Egyptian court ruled to withdraw new factory licences from Ezz Steel, Beshay Steel and Suez Steel, after finding that rights had been missold by members of the country's former regime. 
 
News reports indicated that the government asked the companies to pay at total of LE1.4 billion to keep their licenses.
 
Sources at steel firms have told Ahram Online they would refuse the request and were likely to appeal the ruling. 
 
Eissa said the Prime Minister and Minister of Justice have held meetings to discuss ways of implementing the court order.
 
He denied that companies are refusing to pay for the licences, saying that they are waiting to review the grounds for the ruling.
 
Eissa indicated that the steel market would not be affected by the ruling, saying that if prices soar it will be down to the individual behavior of steel traders.
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