Orascom Development Egypt (ODE) has inked an agreement with Egyptian authorities to expand El Gouna

Newsletter

19 Feb 2023

Orascom Development Egypt (ODE) has inked an agreement with Egyptian authorities to expand El Gouna. Under the agreed master plan, the company will develop its remaining 17.4 mn sqm land bank, adding 1.2 mn sqm of connected lagoons and 1k hotel rooms every 10 years. El Gouna sits on a total land area of almost 37 mn sqm. Some 11 mn sqm have already been developed. The agreement also gives Orascom the right to connect its lagoon system to the sea, which it says will improve water quality for its Gouna residents. It will also push back the shoreline setback for its unbuilt landbank from the current 200 meters to 105 meters, increasing its buildable land. (Al Mal)

ODE will pay 112 million USD in transfer fees for remaining plots, 21 million USD upon signing and the remainder in installments over 15 years
The company is also paying USD 39 mn to settle with the Environment Ministry, which in 2021 fined it for allegedly causing environmental damage while constructing the resort town. The figure also includes payments to obtain environmental permits and approvals for the new developments. ODE will fund its growth from its own EGP 3.8 bn in cash on hand, a USD 30 mn shareholder loan from its parent company, Orascom Development, and future cashflows. (Al Mal)
The EGP stabilized against the USD lats Thursday at 30.62
The currency passed the 30 mark at the end of January following a sharper devaluation that helped stimulate the return of foreign inflows and alleviate FX woes that had stalled imports. But traders see the EGP under pressure over the coming 12 months, saying 12-month non-deliverable forwards eased 1.2% yesterday to 36.025 against the greenback. That suggests traders see the EGP losing a bit more than 14% of its value against the USD over that period. The next choke points to watch for: Demand for USD is unlikely to ease substantially in the run-up to Ramadan as traders finish stocking imported essentials for the holy month. (Bloomberg Asharq)
Egypt aims to make its first sovereign sukuk sale as soon as next week
The government could begin roadshows for the sale this week, the sources said, with the final timing of the issuance dependent on market conditions. The issuance could be worth up to 1.5 billion USD, while FinMin has previously said it will look to issue 1.5-2.5 billion USD of the shariah-compliant bonds. Moody’s, meanwhile, has weighed in on an offering worth up to 5 billion USD, having given this week a (P)B3 rating to a potential 5 billion USD sukuk issuance by the Finance Ministry’s sukuk company. (Bloomberg Asharq)
The issuance “will be used by the company to purchase the usufruct rights to eligible real estate assets,” with the proceeds received by the government
set to “finance investment and development projects included in the economic and social development plan in the state's general budget,” Moody’s writes. The P(B3) rating reflects Moody’s recent downgrade of our sovereign credit rating on “reduced external buffers.”. (Bloomberg Asharq)
Gulf investors are already lining up to get a piece of the planned merger between EGX-listed Sidi Kerir Petrochemicals (Sidpec) and Egyptian Ethylene and Derivatives Company (Ethydco)
The unidentified investors are reportedly looking to acquire between 16-20% of the new company, a number that could go up or down after the merger wraps up. The companies have not yet received any official bids. The two companies are currently working on fulfilling the requests of their financial and legal advisors. Sidpec currently owns 20% of Ethydco, making it the company’s second-largest shareholder. (AL Mal)
Madbouly directs to provide industrial lands for Turkish investors to pump new investments
Dr. Mostafa Madbouly, Prime Minister, to follow up on the executive position for providing industrial land at the level of the Republic, referring in this regard to the meeting he held yesterday with a number of Turkish businessmen and investors, during which ways to inject more new investments into the Egyptian market and expand existing investments were discussed, tasked with quickly providing industrial lands. Which was requested by a number of Turkish investors during the meeting. (Al Mal)
Emirates announces increased flights to and from Cairo from 29 October
Emirates will increase its frequency to and from Cairo to 28 weekly flights from October 29. Currently, there are 25 weekly flights between Dubai and Cairo, according to a previous statement by the Emirates airline. Less than a year after the airline's founding, in 1986 Emirates launched its route to Egypt, the first country in the Middle East and North Africa to operate. Starting in October, the airline will operate four daily flights to Egypt, including three Airbus A4 flights and a Boeing 3 flight. Emirates is part of the Emirates Group, which includes dnata, a company that provides aviation, cargo and in-flight catering services in the UAE. (Zawya)
Al-Mashat reviews the food axis projects within the national platform for green projects
The Minister of International Cooperation indicated that the program adopts an approach based on achieving comprehensive development and directly benefits citizens by providing solutions that provide renewable energy at reasonable prices, enhance food security, and protect areas most vulnerable to the repercussions of climate change to make them more livable, especially the delta regions. Which is classified by the government agency concerned with climate change as one of the areas most vulnerable to climate change. (Arab Finance)
Al-Mashat added that the program includes 9 projects aimed at a just transition towards renewable energy
Improving the flexibility and ability to adapt to climate changes among the local population, providing clean water and sustainable management of water resources, stressing that the projects cover the three main axes to confront climate change, namely mitigation.adjustment, loss and damage. (Arab Finance)
Ethydco, the chemicals firm, is among the 32 state-owned companies that the government is looking to part-privatize over the coming 13 months
The government has not mentioned Sidpec as being in line for privatization though an unconfirmed press report claimed it could look to offer a secondary stake to investors. Saudi and Emirati sovereign wealth funds have together acquired significant minority stakes in two of the country’s largest fertilizer companies — Abu Qir Fertilizers and Misr Fertilizers Production Company (Mopco) — and are now reportedly after stakes in Helwan Fertilizers Company. Undisclosed Gulf funds are also looking to acquire shares in El Nasr for Fertilizers and Chemical Industries (Semadco). (Al Mal)
The Administrative Capital jumps in the profits of the Egyptian "Talaat Mostafa" by 25%. The revenues of the largest real estate group in Egypt amounted to 20 billion EGP in 2022
Talaat Moustafa Holding, the largest real estate company listed on the Egyptian Stock Exchange, net profits amounted to 2.23 billion EGP in 2022, an annual increase of 25%, supported by sales of residential real estate units and commercial offices, especially in the group’s project in the administrative capital “Celia”, and the performance of the hotel sector. The group's consolidated revenues increased on an annual basis by 29% to about 19.9 billion EGP in 2022. (Hapi Journal)