The National Bank of Egypt (NBE) will defer EGP5bn of debt payment installments for clients operating in Egypt’s tourism sector, according to Yehia Abul-Fotouh, Chairman of the Debt Processing department of the NBE.
This decision was based on a Central Bank proposal to postpone debt repayments for the country’s tourist sector until March 2014.
The NBE’s loan default portfolio totaled EGP6bn by the end of June, compared to EGP6.2bn by the same period during the previous fiscal year.
Abul-Fotouh denied that recent events taking place in Egypt had any effect on the decision taken by the bank to reduce its default portfolio by EGP1bn, with the hope of reaching EGP5bn by the end of the current fiscal year. He added that there was still plenty of time to conduct new settlements.
Abul-Fotouh stated that the bank hoped within the next two months to conclude agreements with Acrosteel, to settle EGP1.7bn worth of company debt. Acrosteel held a meeting with its board of directors last week with the goal of forming a committee to implement financial restructuring, in addition to studying an offer put forth by the NBE to put a cap on the company’s debt by allowing the former to own larger shares of Acrosteel.
The NBE currently owns 7% of Acrosteel, a number it hopes to see increase to anywhere between 40% and 50%, after purchasing stocks owned by existing shareholders. In the event that the offer is accepted, the NBE would then put forward a cash settlement option to cover the rest of the company’s debt, in addition to finding new ways to secure additional funding.
Acrosteel’s total authorised share capital is currently EGP800m, with EGP346.1m issued and paid, distributed over 1.7 million shares at a face value of 200 million shares. 19% of company equity is owned by the National Investment Bank (NIB), 13% by the Misr Insurance Holding Company, 9% by the Metallurgical Industries Company, 8% by the Egyptian General Petroleum Corporation, and 7% each by the NBE, Egyptian Reinsurance Company, and Arab Investment Company, the latter of which is owned by 17 Arab countries. 6.5% of company equity is owned by the Suez Canal Authority, and 5% by the Industrial Development and Worker’s Bank of Egypt along with other shareholders.
The NIB’s debt default portfolio totals EGP23bn, with EGP18bn in settlements having recently been conducted. This includes a EGP7bn cash proceeds settlement set to take place over a period of 5 years. The NBE’s balance of debt defaults currently totals EGP6bn, while the bank’s good loans portfolio has recently increased from EGP70bn to EGP95bn.
Translated from Al Borsa newspaper