Egypt Independent

NIB owed LE8 billion by public firms, bank says



Public-sector companies owe Egypt’s National Investment Bank (NIB) approximately LE8 billion, according to a bank estimate. Meanwhile, a prominent government source has stated that the debt is distributed among 19 companies, most of them in the textile sector.

According to NIB CEO Amr el-Garahi, some of the indebted companies are still in operation, while others are in the process of being liquefied.

El-Garahi added that “all options were open” to the bank to settle the debts, including taking payments in the form of land or stock from indebted companies. He said the bank might ask for assistance from the Central Accounting Authority (CAA) to take an inventory of the companies’ debts, even though such debts have already been officially documented.

The government source said that the Investment Ministry was studying a number of ways by which the debts might be settled. He said that the ministry was particularly interested in a scenario in which the bank would write off debts in exchange for partial ownership of the companies. It is also considering giving the bank portions of the companies’ unused land in exchange for debt relief.

The source compared the current situation with settlements the ministry orchestrated with public banks. In that settlement, the ministry paid banks LE10.7 billion to settle unpaid debts owed to it by public-sector companies, in addition to granting them LE3.5 billion worth of land. He said he expected any future settlement with the NIB to be “simple” compared to the ministry’s settlement with public banks.

Investment Minister Mahmoud Mohie Eddin stated last Thursday that the exact amount owed by public-sector companies had yet to be determined, noting that the CAA was currently working overtime to prepare an estimate.

Translated from the Arabic Edition.