Lebanon will begin privatisation soon

Lebanon plans to embark on a long-delayed privatisation drive in the next few months as part of efforts to attract foreign aid to rein in its $36 billion public debt, Economy Minister Sami Haddad said yesterday.

Haddad said the government hopes to start selling its profit-making telecommunications companies and flagship carrier Middle East Airlines by December or January.

"We need to start the privatisation process whether we like it or not," he said.

"If a bank is chasing you for loans you took, you have no choice but to sell your car and house and other possessions to pay back even if it was against your principles."

Political disturbance has stalled Lebanon's privatisation plans, which was a self-imposed condition in a 2002 Paris aid conference which earned the country almost $4 billion in cheap loans to replace more expensive borrowings.

The government does not need the parliament's nod to sell the airlines, but it cannot offload Ogero Telecom Lebanon's fixed telephone lines monopoly or the country's two mobile phone operation licenses without the legislature's approval.

And although the government and its allies enjoy a parliamentary majority, Lebanon's sectarian, social and political structure makes reaching a consensus among its major power players necessary to pass key economic plans.

Haddad, also a minister of trade, said the government was in talks with political groups to highlight the need for privatisation, especially with another international aid conference expected in Beirut before the end of the year.

"The (2002) Paris conference was an incredible opportunity for Lebanon... But we lost three years because we did not implement any economic reforms due to political reasons," he said.

"Raising $2 billion or $3 billion through privatisation will help increase our revenues and reduce spending," he added.

acquisition

BLOM will bid for Egyptian bank

Lebanon's BLOM will bid for Egypt's Misr Romanian Bank in a deal that would be worth about 590 million Egyptian pounds ($103 million).

BLOM has already agreed to buy the stakes held by the two main Egyptian and Romanian shareholders, which together amount to about 52 per cent. BLOM will launch an offer to buy the remaining shares, or at least 67 per cent of the bank, at 11.82 pounds ($2.06) per share.