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Sunday, 23 December 2018

Egypt signs USD 35 mn settlement agreement with IFC for Omar Effendi debt

Gov’t signs USD 35 mn settlement agreement with IFC for Omar Effendi debt: The Omar Effendi Company signed on Thursday an agreement with the World Bank’s International Finance Corporation (IFC) to settle the company’s USD 35 mn debt to the corporation, according to a Cabinet statement. The agreement will see the Holding Company for Construction and Development repay the full amount owed to the IFC, with the Finance Ministry acting as guarantor of the settlement. The agreement also stipulates that the IFC will stop all legal proceedings it had brought against the storied (and now ailing) retailer.

Background: The dispute dates back to 2007, when the IFC agreed to provide Omar Effendi with USD 40 mn in financing and purchase a 5% stake in the company, all of which were meant to fund the retailer’s comeback bid. A 2011 ruling by the Administrative Court overturned the share sale, at which point Omar Effendi stopped repaying the loan.

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