Beirut (APD) - Cairo-based Arabia Cotton Ginning Company formally announced its partnership with Saudi financiers in a joint venture holding company with a authorized capital of LE 10 billion ($1.73 billion) that will invest in the textile sector.
According to a statement by the company's board of directors from Thursday, the new firm with paid-up capital of LE 1 billion will be called Amwal Al Arabia Holding Company and its first transaction will be the 100% acquisition of Modern Nile Cotton Company, in which Arabia Cotton Ginning last December bought 60%, according to media reports.
Based on a substantial increase in the price of Modern Nile Cotton Company, this deal will generate LE 104 million in profits for Arabia Cotton Ginning, the company said.
Moreover, Amwal Al Arabia will also buy 50% of Egyptian Textiles Company which started production in March 2006 and raised its capital to LE 160 million.
Arabia Cotton and Riyadh-based Amwal Al Khaleej Commercial Investment Company will each one hold a 43% stake in the new company. Minority stakes will be held by two state-owned Egyptian entities - Arab Polvara Spinning and Weaving Company with 1.5% and General Coop for Agrarian Reform with 2%. The remaining 10.5% in Amwal Al Arabia Holding Company will be owned by the public.
The chairman of the arbitration authority of cotton in Egypt, Salah al Attar, stated on Sunday that Egyptian revenues from cotton exports for the season of 2005 -2006 that ended in May, reached $203 million and production amounted to 76,590 tons, Egypt's Al-Ahram daily reported Monday.
Attar said that Egypt exports cotton to 25 countries with India being the largest buyer with a 22% share, followed Pakistan (21%), Italy, Switzerland, and the United States.
Established in 1947, Arabia Cotton Ginning focuses on spinning of cotton yarn and finishing of woven cotton cloth.
The company's stock price increased by 2.24% to LE 8.65 on Sunday compared with LE 8.46 on its previous close on Tuesday of last week. [TS]
By Nadim Issa, APD Staff Writer in Beirut
APD (Arab Press Digest) 2006
