Cablegate: Bank of Alexandria (Boa): Final Sale Executed

VZCZCXYZ0001
RR RUEHWEB

DE RUEHEG #7150 3481810
ZNR UUUUU ZZH
R 141810Z DEC 06
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC 2946
INFO RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC 0244

UNCLAS CAIRO 007150

SIPDIS

SIPDIS

STATE FOR NEA/ELA, NEA/RA, EB/IDF/OMA
USAID FOR ANE/MEA MCCLOUD AND DUNN
USTR FOR SAUMS
TREASURY FOR NUGENT AND HIRSON
COMMERCE FOR 4520/ITA/ANESA/TALAAT

E.O. 12958: N/A
TAGS: ECON EAID EFIN EINV EG
SUBJECT: BANK OF ALEXANDRIA (BOA): FINAL SALE EXECUTED

REF: Cairo 7059

1. (U) BOA Vice Chair Fatma Lotfi confirmed to econoff that the
final sale of the bank was executed on the Cairo and Alexandria
Stock Exchange (CASE) on December 12. The CASE website indicated
that 128 million shares traded on December 12 at LE 71.99/share
($12.60), for a total value of LE 9.2 billion ($1.6 billion). Lotfi
indicated that late last week the new owner, Italy's SanPaolo,
fulfilled the remaining clause in the sale contract and named eight
of the ten members of the new board of directors. The Central Bank
approved the final sale December 11, but did not name the two GOE
representatives on the board of directors.

2. (U) Contacts at the Ministry of Finance informed econoff that
the GOE has not completed deliberations on use of the proceeds from
the sale. The most likely use, however, would be settlement of the
non-performing loans (NPLs) of the remaining public banks. Banque
Misr Vice Chairman Mohamed Ozalp told econoff last week that he
believed the GOE would settle Banque Misr's debts before those of
the National Bank of Egypt (NBE). Banque Misr and Banque du Caire
are scheduled to merge by December 31, 2006. The Central Bank wants
the newly merged entity, which will retain the name Banque Misr, to
start operating with a clean balance sheet before tackling the much
larger NPL portfolio of NBE. For the time being, the proceeds from
BOA's sale will remain in the Central Bank, bringing the GOE's
foreign currency reserves to $25 billion.
RICCIARDONE

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