Egypt aims to tap debt markets for up to $7bn in new financial year

Egypt aims to conclude a non-financial agreement with the International Monetary Fund by October to replace a three-year loan deal that expires this month. (File/AFP)
Updated 26 June 2019

Egypt aims to tap debt markets for up to $7bn in new financial year

  • Officials are considering different programs under IMF
  • Egypt may sell up to $7 billion in int’l bonds in 2019-2020

LONDON: Egypt will tap debt markets for between $4 billion and $7 billion in the coming financial year starting in July and is in talks with the IMF about a non-financial deal to help entice investors, its finance minister said on Tuesday.
The country was considering all options for debt instruments, including sukuk, green bonds and Asian currency bonds, Finance Minister Mohamed Maait told Reuters on the sidelines of an investment conference at Bloomberg in London.
“This time last year I said we would go for between $4 to $7 billion and eventually we went for $6.2 billion,” he said. “Let me repeat what I said last year: between $4-7 billion (for this coming financial year). It depends on market conditions, demand and whether we can diversify to other instruments as we are hoping for green bonds, sukuk.”
The Egyptian parliament on Monday approved the government’s budget for the coming 2019/2020 financial year, targeting a 7.2 percent deficit for the year and 6 percent GDP growth.
Now that the budget was approved, Egypt will start talks with banks in the first quarter from July to September about a potential bond issue, Maait said, adding that the period from November to February was the normal time for any issuance.
Depending on financial conditions, the country could also consider tapping finance from other sources, including the World Bank, African Development Bank, European Bank for Reconstruction and Development and European governments such as France and Germany, he added.
“In the Middle East, development partners find Egypt as somewhere to go for as other places have problems. Egypt needs funding for infrastructure and the development partners have the money,” Maait said.
Egypt signed a three-year, $12 billion loan program with the IMF in late 2016, seeking to attract back international investors who pulled out after an uprising in 2011.
Maait said the government was in talks with the IMF about a new non-financial program that could last around two years with a plan to reach a deal by October. “It would give comfort to international investors and international institutions.”


Huawei in early talks with US firms to license 5G platform: executive

Updated 19 October 2019

Huawei in early talks with US firms to license 5G platform: executive

  • Currently there are no US 5G providers and European rivals Ericsson and Nokia are generally more expensive
  • Huawei has spent billions to develop its 5G technology since 2009

WASHINGTON: Blacklisted Chinese telecoms equipment giant Huawei is in early-stage talks with some US telecoms companies about licensing its 5G network technology to them, a Huawei executive told Reuters on Friday.
Vincent Pang, senior vice president and board director at the company said some firms had expressed interest in both a long-term deal or a one-off transfer, declining to name or quantify the companies.
“There are some companies talking to us, but it would take a long journey to really finalize everything,” Pang explained on a visit to Washington this week. “They have shown interest,” he added, saying conversations are only a couple of weeks old and not at a detailed level yet.
The US government, fearing Huawei equipment could be used to spy on customers, has led a campaign to convince allies to bar it from their 5G networks. Huawei has repeatedly denied the claim.
Currently there are no US 5G providers and European rivals Ericsson and Nokia are generally more expensive.
In May, Huawei, the world’s largest telecoms equipment provider, was placed on a US blacklist over national security concerns, banning it from buying American-made parts without a special license.
Washington also has brought criminal charges against the company, alleging bank fraud, violations of US sanctions against Iran, and theft of trade secrets, which Huawei denies.
Rules that were due out from the Commerce Department earlier this month are expected to effectively ban the company from the US telecoms supply chain.
The idea of a one-off fee in exchange for access to Huawei’s 5G patents, licenses, code and know-how was first floated by CEO and founder Ren Zhengfei in interviews with the New York Times and the Economist last month. But it was not previously clear whether there was any interest from US companies.
In an interview with Reuters last month, a State Department official expressed skepticism of Ren’s offer.
“It’s just not realistic that carriers would take on this equipment and then manage all of the software and hardware themselves,” the person said. “If there are software bugs that are built in to the initial software, there would be no way to necessarily tell that those are there and they could be activated at any point, even if the software code is turned over to the mobile operators,” the official added.
For his part, Pang declined to predict whether any deal might be signed. However, he warned that the research and development investment required by continuously improving the platform after a single-transfer from Huawei would be very costly for the companies.
Huawei has spent billions to develop its 5G technology since 2009.