Al Futtaim eyes $500m Mall of Egypt loan

Majid Al Futtaim (MAF) has picked two Egyptian banks to arrange a loan worth around $500 million (Dh1.84 trillion), to fund construction of its Mall of Egypt project, three sources with knowledge of the move told Reuters.

The developer has chosen Banque Misr and National Bank of Egypt as lead arrangers for the deal, two of the sources said. The cash will be used to fund the group's Mall of Egypt, a 160,000 square metre site in Cairo which will be one of North Africa's largest shopping centres.

A proposal is expected to be sent to other banks in the next two weeks, once final decisions over the transaction structure have been made. Commitments in dollars and Egyptian pounds are likely to be permitted, the sources said.

Interest in the deal is likely to be restricted to local and regional banks as many internationals have restrictions on lending into Egypt following political unrest there.

"I don't see MAF going outside the local banks. There aren't a lot of banks outside Egypt that are going to put money on the table right now," one of the sources, a London-based banker, speaking on condition of anonymity, said.

MAF wasn't immediately available for comment. MAF chief executive Iyad Malas told Reuters in October that it was talking to local banks about securing 13-year finance to fund a new mall in Egypt.

The Mall of Egypt loan had been earmarked for early 2011 but the political unrest resulted in the plans being postponed, a separate source at an international bank said.

MAF has two malls, three hypermarkets and some supermarkets in Egypt.

Palm Hills

Egypt's second-biggest listed property developer, Palm Hills, reported Monday that it made a net loss of 331.3 million Egyptian pounds (Dh201.62 million) last year, compared with a profit of 526 million pounds in 2010, as sales revenue plunged 67.6 per cent.

The firm suffered from last year's uprising that toppled President Hosni Mubarak and was followed by graft probes that froze sales and increased cancellations. Palm Hills is among several real estate firms facing legal challenges contesting its land acquisition deals with the state.

Analysts said they had expected a big drop in the company's yearly sales.

"We cannot say the results were unexpected. We expected a sharp drop in revenues due to the unsolved legal disputes between the state and the company on land deals which made people less interested in buying from the company," investment and capital market analyst Nader Khedr said. "Plus most of the firm's projects are in remote areas that many people now see as not safe, given the drop in security in Egypt since the uprising," he added.

Khedr also blamed the losses on the general slowdown in the Egyptian economy after the uprising.

Egypt's economy continues to suffer from worker strikes and political uncertainly, which have kept investors and tourists away.

Orascom

Egypt's Orascom Tele-com Media Technology (OTMT) received approval Monday for its global depositary receipts (GDRs) to trade on the London Stock Exchange, the company said in a statement. It said it expected trading to start on March 13.

OTMT was formed after Egyptian telecoms magnate Naguib Sawiris sold most of his assets to Russia's Vimpelcom in a $6 billion deal last year.

It includes telecom businesses in Egypt and North Korea and various other assets not included in the Vimpelcom deal.

OTMT said last month it had reached a preliminary accord to sell most of its stake in Egyptian telecoms operator Mobinil to fellow shareholder France Telecom. It said it would give shareholders much of the $1 billion it stands to gain from the Mobinil deal and keep part of it for new business opportunities.

Centamin

Centamin Plc said normal operations resumed at its Sukari gold mine in Egypt after labour unrest earlier this month.

First-quarter production and cash costs will be affected by the stoppage, Centamin said yesterday in a statement. Full-year output and cash-cost guidance remains unchanged.