The Algerian government’s $230 million back-tax claim against Egypt’s Orascom Telecom is not final until the company is given a chance to challenge it, the firm said in a statement published on Wednesday.
Orascom’s chairman Naguib Sawiris has agreed to sell most of his telecom interests, including control of Orascom Telecom, to Russian mobile operator Vimpelcom, but the sale of OT’s Algerian subsidiary Djezzy has been opposed by the Algerian government.
Last month Orascom said Djezzy, its most lucrative asset, had received a new back-tax request from the Algerian government. The firm had already been served over $600 million worth of separate claims.
Orascom said it had 40 days to challenge the new claim after receiving notice of the reassessment. Algeria’s Direction des Grandes Enterprises would then study any arguments made by the firm against the claim and issue a final reassessment.
"We would like to stress the preliminary nature of the notification," Orascom said.
The firm would then have 30 days to either pay the full claim or pay one-fifth in order to appeal. The company could recover this amount if the appeal was successful, it said. –Reuters
HED: Upper Egypt Contracting sees profit trebling
Upper Egypt Contracting (UEC), a builder of low-cost housing and hotels, expects to treble its profit over the coming two years as Egypt’s construction market grows, its chairman said on Tuesday.
UEC is a contractor for several housing developers listed on the Egyptian stock exchange. The formerly state-controlled firm was partially privatized in the late 1990s.
"We were in a recession in real estate but are heading towards a period when it will flourish," Mokhtar El-Dahshoury said at the Reuters Middle East Investment Summit in Cairo.
Investors have been rattled by uncertainty over ownership of former state land in Egypt since a court said in June that a sale of land for the flagship project of Egypt’s biggest listed developer Talaat Moustafa Group was illegal.
Dahshoury said a crisis of confidence in real estate has subsided, while power cuts that have plagued the country’s cement industry will be overcome, reducing cement prices.
UEC expects to increase net profit in the fiscal year that began on July 1 to LE 100-120 million ($17.5-21.0 million) from LE 69 million in 2009/10, and to LE 200-250 million the following year, he said.
The company is waiting for a slowdown in the real estate sector to come to an end before units at a project in an upmarket neighborhood of Cairo go on sale, he said. The Darna project includes residential towers and a shopping center.
"We will achieve from this net profit of LE 500 million. However there is a recession in the market and we are awaiting a revival in real estate to start selling," said Dahshoury.
He said he planned to divide UEC into five companies — contracting, real estate, tourism, finance and quarrying — by the end of 2011, all under a single holding company. It plans to expand into the Arab Gulf region, with a headquarters in Saudi Arabia once it receives necessary permits.