Egypt and Iran strike deal to salvage joint firm

Egyptian and Iranian officials have reached a deal to restructure the Egypt-Iran Company for Spinning and Weaving, after Egypt failed to sell its losing share, sources said.

The firm operates out of Suez Governorate.

Both parties agreed to pump LE79 million into the company’s capital. Egypt will provide just over half that total, the deal stipulates.

The Egyptian government owns 51 percent of the company. Twenty seven percent of its ownership is allocated to the Holding Company for Spinning and Weaving (HCSW) and 24 percent to the National Investment Bank.

Head of the firm, Mohsen al-Jeelany, said the deal aims to restructure ownership, currently threatened with clearance.

Al-Jeelany told Al-Masry Al-Youm that Iran will pump around LE39 million to maintain the company, adding that amount is provided through a non-governmental authority charged with managing Iranian investments abroad.

The deal was struck after Egypt ruled out selling its share, al-Jeelany said.

In April 2008, the firm assessed its share ahead before proposing the entire share of public money (51percent) to be sold to either a key investor or many investors at assets valued at roughly LE300 million.

An official at the Egypt-Iran company said the Egyptian share was to be sold to the Iranian partner, according to a contract of partnership struck between the two parties which stipulates that priority should be granted to any of them in the event the other sought a sale.

Around 4000 workers work for the firm. Many protests took place at the company after the owners announced the government's intention to sell its share, sources said.

Translated from the Arabic Edition.

Related Articles

Back to top button