Tolba: Nasr City plot remains main obstacle; no talk of withdrawing offer
CAIRO: A 16,000 sq. m. land plot in Nasr City has caused a contract signing delay in Trade Holding Company s (THC) sale of Omar Effendi to Amwal Group of Saudi Arabia. The contract was scheduled to be signed Sunday morning after THC s general assembly approved sale terms in late September.
Magdi Tolba, Anwal financial advisor, says his company made the postponement decision based on new contract terms entered by THC to maintain ownership of the Nasr City plot, an asset of Omar Effendi, and lease it to Amwal on a contractual basis. Tolba confirmed that negotiations regarding the land plot had gone on for several hours Sunday, but denied the company is considering withdrawing its offer.
THC s position is leveraged by a LE 20 million letter of guarantee from Amwal.
Our offer still stands, Tolba told The Daily Star Egypt. And we re ready to sign the contract as soon as this situation is resolved.
Tolba says negotiations are still ongoing and expects a resolution in a small number of days.
In late September a THC negotiation committee finalized the sale of 90 percent of Omar Effendi s shares to Amwal for LE 589 million. According to a report released by the committee, Amwal agreed to keep 4,800 of the retailer s 6,000 workers and pay LE 50 million in early retirement to the rest. The company also committed to keeping at least 58 of the chain s 82 branches and to spend LE 200 million over the next six years for development and modernization.
Tolba says Amwal is prepared to continue with the deal as long as final contract terms correspond with contract terms agreed upon with THC negotiators.
We insist on including all of Omar Effendi s assets in the deal because our offer was for the purchase all of Omar Effendi, says Tolba.
THC Chairman Hadi Fahmy was not available for comment as of press time.
Privatization of Omar Effendi has been set back a number of times in the past year after a decade of failed attempts. The highest offer received prior to Amwal s had amounted to only LE 350 million. Still, THC s approval of Amwal s offer was met with fierce public condemnation, especially after a valuation committee made up of THC subsidiary presidents declared the chain worth more than LE 1 billion.
In early September, THC filed a claim to the prosecutor general s office against businessman Saeed El-Hanash for delaying the deal with a false LE 2 billion offer. El-Hanash has since filed a counterclaim, but no measures have been taken by the prosecutor general in either side s favor.
The 150 year-old Omar Effendi chain recorded profits of LE 2 million for the first time in 2005 after five consecutive years of losses.
Anwal is a Riyadh-based women and children s clothes retailer, operating more than 140 stores with a workforce of about 600 employees.