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Cablegate: Largest Libyan Investment Company Devotes Capital Resources

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Brooke F Adams 09/12/2006 01:59:07 PM From DB/Inbox: Brooke F Adams

Cable
Text:


UNCLAS TRIPOLI 00475

SIPDIS
CXCAIRO:
ACTION: ECON
INFO: PA POL IPS FCS FAS DCM AMB AID MGT

DISSEMINATION: ECON
CHARGE: PROG

VZCZCCRO012
RR RUEHEG
DE RUEHTRO #0475/01 2501427
ZNR UUUUU ZZH
R 071427Z SEP 06
FM AMEMBASSY TRIPOLI
TO RUEHC/SECSTATE WASHDC 1178
INFO RUEHTRO/AMEMBASSY TRIPOLI 1332
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHEG/AMEMBASSY CAIRO 0408
RUEHVT/AMEMBASSY VALLETTA 0096
RUEHRO/AMEMBASSY ROME 0197
RUEHTU/AMEMBASSY TUNIS 0525
RUEHAS/AMEMBASSY ALGIERS 0299

UNCLAS SECTION 01 OF 02 TRIPOLI 000475

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: ECON EINV PREL LY
SUBJECT: LARGEST LIBYAN INVESTMENT COMPANY DEVOTES CAPITAL RESOURCES
TO US FOR FIRST TIME IN 20 YEARS


1. (SBU) SUMMARY. The Chairman & General Manager of Libya's
largest investment company, the Libyan Foreign Investment
Company (LFICO), recently met with Econoff to discuss the
company's history and future prospects for investment. LFICO,
government owned and established in 1981, is moving away from
its previous focus on investments in Africa and turning more
towards the Middle East, Europe, and even the US. The company's
portfolio, while diverse, has an emphasis on the hotel and
agriculture industries, especially in neighboring Egypt. This
month, LFICO, part owner of the Maltese-based Corinthia Hotel
Group, formally announced its first major post-sanctions deal
with a US company, Dallas based Wyndham Hotel Group, and is also
investing in bio-diesel plants in Houston. END SUMMARY.

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COMPANY BACKGROUND

2. (SBU) Econoff reviewed LFICO's current activities and future
plans with General Manager and Chairman Abdulfatah Sharif on
August 16th. Established in 1981 under the name Libyan Arab
Foreign Investment Company (LAFICO), the company is wholly owned
by the General People's committee that serves as the equivalent
of a Ministry of Trade and Economy and managed by a board of
directors. The Libyan Arab Foreign Bank (LAFB), the parent of
the LFICO, is controlled by Libya's central bank. Approximately
200 LFICO employees work in the company's headquarters in
Gharyan, a desert town 80 miles south of Tripoli, while
approximately 100 operate in overseas offices located in Cairo,
Valletta, Rome and other capitals. LFICO operates in some ways
like other Jamahiriya entities, with Libya based employees
receiving a relatively modest government salary, while those
posted abroad are compensated with higher wages in dollars or
euros. Sharif, an economist by training, started with the
company in the late 1980's and worked his way up to his present
position. Sharif said the company, with a present capital of US
2 billion, is moving away from the trend of investing in African
companies, a portfolio now being managed by its subsidiary, the
Libyan African Investment Company.

EMPHASIS ON HOTEL AND AGRICULTURE INDUSTRIES

3.(SBU) Sharif described LFICO's investment portfolio as
diverse, but primarily centered around the hotel and agriculture
industries. In neighboring Egypt, where LFICO maintains 22 full
time employees, the company as a heavy stake in the hotel
industry, owning 15% of the Conrad, 20% of the Ramses Hilton, as
well as shares in the Sheraton and JW Marriott. It recently
purchased 100% of the high end Four Seasons Hotel in Sharm
Al-Sheikh. Sharif characterizes the hotel industry as "less
risky than manufacturing," a motivating factor in their
investment strategy. The company also own approximately 30,000
acres of agricultural land in Egypt, mainly utilized for
agricultural investment projects and cultivating fruits and
vegetables. LFICO boasts an assortment of other investments
throughout Europe, North Africa, and China, where it has
invested in the textile and electronics industries. In Europe,
much of its capital is focused on Italy, its former colonizer,
where it purchased 2% of Fiat. In 2001, LFICO bought 7.5% of
Italian soccer club Juventus, and Qadhafi's soccer aficionado
son Al-Saadi sits on the board. LFICO also owns 15% of Tamoil
Europe and has over 500 million USD worth of real estate
investments in the UK.

US INVESTMENTS

4. (SBU) With the lifting of US sanctions on Libya, LFICO has
started to reenter the US market, where its assets were frozen
in 1986. In what Sharif characterizes as LFICO's most
significant post-sanctions investment in the US, on August 10,
the Maltese based Corinthia Group of Companies, 47% owned by
LFICO, announced an agreement with the Wyndham Hotel Group to
jointly manage 15 existing Corinthia hotels under the Wyndham
and Ramada brands in the Europe, Middle East, and Africa
regions. According to the manager of the Corinthia in Tripoli,
the location of the US Embassy, the details of the agreement
have yet to be finalized, but many four-star Corithia Hotels in
Europe and the Middle East will take on the Ramada name, while
some five star hotels will take on the Wyndham logo. The
companies will also start to merge hotel management services,
sales and marketing teams. LFICO also recently purchased 50% of
a bio-diesel plant from the Geogreen company operating out of
Houston, Texas. According to Sharif, Geogreen and LFICO plan to
open several new bio-diesel plants in Texas over the next two
years. LFICO is also actively investing in the NYSE, NASDAQ, and
Chicago Exchange Market.

5. (SBU) COMMENT. Prior to the ending of sanctions, company
management had been elusive with western media about sharing
information on its investment portfolio. Econoff provided Sharif
with the contact information for appropriate interlocutors at
the Department of Commerce, and encouraged him to get in touch
with them regarding any inquiries they might have on investment
in the US . END COMMENT.
GOLDRICH

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