Egypt - The international law firm Clyde & Co has been working on eight mergers, acquisitions, and restructuring deals in Egypt, since it opened an associated office in Cairo last February.
The new firm, Barakat, Maher & Partners Advocates & Legal Consultants, works on deals in non-banking financial activity, in addition to a number of other deals in the insurance, pharmaceutical and construction sectors, the firm said in an interview with Daily News Egypt.
Mohamed Barakat, the partner at Clyde & Co, and Managing Partner, Barakat, Maher & Partners Advocates & Legal Consultants, said that there is a strong interest from foreign investors to invest in Egypt, especially in the sectors of education, health care, construction, financial technology, the non-banking financial sector, and agriculture. He stressed that the office was launched mainly to serve foreign investors in the Middle East, especially Egypt, which is a promising economy.
He added that the infrastructure that Egypt has launched during the past years, although it does not generate a direct return on investment, but it has an economic return that will show its impact after a while and will attract investors, stressing that Egypt is the second largest Arab economy, and its economy is one of the most developed and diversified economies in the Middle East.
Barakat added that the Egyptian economy is diversified, stable, and has great capabilities, so we decided to enter the Egyptian market, because there is a need for an international law firm that facilitates attracting foreign investments to Egypt, and provides advice on the dimensions of the regulatory environment and laws.
He added that the experience they possess helps them to facilitate complex rules for investors, and their proficiency in more than one language helps them communicate with different nationalities, and although they are not the only office, they have a mixture of international experience and strong knowledge of local laws.
Barakat said that the timing of Clyde & Co’s entry into Egypt, in conjunction with the current challenges, gives a strong indication of the optimistic vision of the Egyptian economy, given its solid foundations, strategic location, and security stability, stressing that the office has a strong team with great capabilities, not just qualifications, which makes the vision towards the timing is just right.
In terms of government offerings, Barakat said that even the intended offering should attract foreign investors to generate dollar liquidity, but its completion and limitation to the local subscription will be successful and achieve restructuring and expansion of the ownership structure, but it will not achieve its goal.
The Cabinet announced last February its intention to offer shares in about 32 companies over the course of a full year, starting from the first quarter of 2023, until the end of the first quarter of 2024.
Barakat expected that most investors wishing to invest in the proposals would wait until the vision becomes clear regarding the exchange rate of the pound against the dollar, explaining that things have already begun to move and that there are great opportunities to attract investments, but the currency shortage confuses them, stressing that it is a short-term problem.
He revealed that the office submitted offers to 4 companies within the government offerings, while one of the public offerings is currently working in the Gulf markets at the present time.
Mostafa Elsakaa, the partner in the corporate group at Barakat, Maher & Partners in association with Clyde & Co, and head of the financial markets sector in the office, believes that the crisis in Egypt at the present time is transient and will end as soon as foreign liquidity becomes available, explaining that the solutions are somewhat difficult, but they will end.
He stressed that Egypt has a stable monetary system, and the Central Bank plays its role in supervising banks in an excellent way, and there is no fear of its ability to provide funds.
Regarding the office’s deals, Elsakaa revealed that the office is currently working on a number of mergers, acquisitions and restructuring deals, especially in the renewable energy sector, in addition to that there are a number of clients in the process of launching companies in the non-banking financial sector, especially in the field of securitization and microfinance.
He pointed out that the office is working on an anticipated securitization process in the form of a securitization program for a real estate financing portfolio, with an estimated value of not less than EGP 5bn, provided that the value of the first issue of it reaches about EGP 1.5bn.
Elsakaa added that they recommend stimulating real estate funds by giving them some tax benefits, which will open the door for the state authorities in the country to participate in real estate funds with investment documents in return for the in-kind assets owned by them, while encouraging the registration of documents in the Egyptian Exchange and their double entry in foreign exchanges, which will help in facing challenges associated with foreign ownership of real estate, and provides a greater scope for foreign investments in the real estate sector in Egypt.
He believes that Egypt’s interest in agriculture and animal production through the Egyptian Countryside Development Company and the 1.5 million feddan project will raise interest in agricultural investment in Egypt, expecting that the sector will benefit in the next stage from infrastructure projects, which will restore Egypt to its leading role in the field of agricultural investment.
Sameh Dahroug, the partner in the corporate group at Barakat, Maher & Partners in association with Clyde & Co, and vice president of the mergers and acquisitions sector in the office, believes that Egypt enjoys security and political stability, and clear legislative policies. These are the most important files for investors, which have become more attractive in light of the infrastructure projects launched by the state.
He stressed that the state has a clear vision towards its portfolio of assets and investments by crystallizing it in the state ownership document, which defines the sectors from which the state will exit permanently, and the sectors that will focus on to invest in it, or to strengthen partnership with the private sector.
He added that this was evident in the government proposals, which were announced in a clear program, which increases optimism in the Egyptian economy and confirms the deals expected to be implemented.
On the legislation side, Dahroug revealed that the office was asked to express its opinion on legislative amendments that give more flexibility to foreigners owning real estate, as well as companies that own real estate in Sinai without prejudice to the sovereignty of the state on its lands.
He added that there is a welcome legislative amendment, which excludes Sharm El-Sheikh, Dahab, and Taba from some restrictions, but there is still a need to adopt some amendments to it in order to achieve the desired goal.
Dahroug said that the desired amendments must take into account the degree of concentration of activities in Sinai, by adopting a percentage of activity concentration as a minimum in that region, in order for these companies to be subject to the legislation regulating investment in Sinai.
He stressed that there are legislations that should see the light soon, such as the unified insurance bill, which stressed its importance in light of the association of insurance activity with almost every home in Egypt and its importance to the state itself, and praised the role played by the Financial Regulatory Authority in cooperation with the Insurance Federation to bring the law to light.
Clyde & Co established its office in Cairo last December as part of an expansion plan in the Middle East region, in which it has been operating for nearly 30 years. The recent office expansions included the recent opening of other offices in Milan, Bangkok, and Santiago.
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