Make reforms while sun shines on world economy: Lagarde

Christine Lagarde said Europe is ‘not united on moving toward greater integration’ (AFP)
Updated 31 December 2017

Make reforms while sun shines on world economy: Lagarde

PARIS: International Monetary Fund Chief Christine Lagarde has urged France and other countries to push through reforms “while the sun is shining” on the global economy.
In an interview with France’s Le Journal du Dimanche published Sunday, Lagarde said the strength of the global economic recovery had taken the IMF by surprise.
“In 2017, for the first time in a long time, we revised our growth forecasts upwards whereas previously we used to lower them,” she said.
Global growth of 3.6 percent was both “stronger and more widely shared” in 2017, she said, noting that developed economies were now growing again under their own steam and no longer merely being pulled along by demand in emerging markets.
Lagarde said the favorable climate lent itself to implementing reforms.
“When the sun is shining you should take advantage to fix the roof,” she said, using one of her favorite maxims.
This year’s global growth is on a par with the average of the two decades leading up to the global financial crisis.
The IMF has forecast a further slight improvement in 2018, to 3.7 percent.
In Lagarde’s native France, seen for years as one of Europe’s weak links, the recovery kicked in in earnest this year.
From 1.1 percent in 2016, growth is expected to rise to 1.9 percent in 2017 — still short of the 2.4 percent forecast for the euro zone as a whole but better than the 1.6 percent initially forecast in the eurozone’s second-largest economy.
Centrist President Emmanuel Macron aims to consolidate the momentum and bring down stubbornly high unemployment with an ambitious program of labor, tax and welfare reforms.
Lagarde said the changes were key to boosting France’s credibility at a time when Macron is pushing for reforms at the European level, including closer integration among eurozone members.
The managing director of the IMF was France’s finance minister in 2008, when the euro looked to be in serious jeopardy.
Nearly 10 years later, the currency is out of the woods.
But, Lagarde warned, “the mission has not been accomplished — and maybe never will — because Europe is not united on moving toward greater integration while maintaining national sovereignty.”


STC postpones its acquisition of Vodafone Egypt for second time

Updated 13 July 2020

STC postpones its acquisition of Vodafone Egypt for second time

  • Kingdom’s largest telecom company says it will need an additional two months to complete the deal

CAIRO: The Saudi Telecom Company (STC), the Kingdom’s largest telecom company, said that it will need an additional two months to complete a deal to purchase a 55 percent stake in Vodafone Egypt.

In January, STC was in agreement to buy the stake for $2.4 billion. In April, it extended the process for 90 days due to logistical challenges stemming from the spread of COVD-19. The company said in a statement that it would extend the period again to September for the same reason.

The Public Investment Fund, the Saudi sovereign wealth fund, owns a majority stake in STC. The ownership of Vodafone Egypt is divided between 55 percent for Vodafone International, which is the target percentage of the Saudi purchase offer, 44.8 percent for Telecom Egypt, and the remaining 0.2 percent for small shareholders.

Telecom Egypt is awaiting the results of Vodafone’s evaluation of the final share price to announce its position on the deal. A Telecom Egypt official stated that the company is still awaiting STC’s position regarding the purchase of the share. If the deal is not completed, it may be presented with its rights to acquire Vodafone’s share, which would allow it to take over 99.8 percent of the company’s shares, leaving 0.2 percent for small investors.

Ashraf El-Wardany, an Egyptian communications expert, pointed out the importance of waiting until the procedures between STC and the Vodafone Group are complete. The results will determine the next steps by Telecom Egypt.

El-Wardany said that the Saudi operator must, after completing the relevant studies, submit a final binding offer at the share price and any conditions for purchase. If approved by Vodafone, it must submit the offer with the same conditions and price to Telecom Egypt, provided that the latter responds within a maximum period of 45 days to determine its position regarding the use of the right of pre-emption and the purchase, or lack thereof, of Vodafone’s share.

According to El-Wardany, there are other possible scenarios. Vodafone International may not be convinced of the offer or the conditions presented by the Saudi side and the sale may be withdrawn, or the Vodafone group may be ready to sell and has prepared another buyer for its stake in Egypt in the event of rejecting the Saudi offer. It may also it back away from the deal and continue to operate in Egypt for a few more years.

El-Wardany said that if Telecom Egypt decides not to use the right of pre-emption to acquire the remaining Vodafone shares for any reason, it will continue with its 44.8 percent stake.
It may also resort to selling all of its shares or part of it to the Saudi side or to any company that wants to acquire its stake.

“This raises the question of whether STC can acquire all of Vodafone’s shares,” El-Wardany said, adding that the coming months “will make the answer clear.”