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The Nile Cotton Ginning privatization dispute is officially settled: The international owner of Nile Cotton Ginning Company (NCGC) and the Holding Company for Construction and Development (HCCD) have signed to settle a 12-year dispute over the ownership of the formerly state-owned company, according to a Public Enterprise Ministry statement.
NCGC parent company IMEX international will pay HCCD EGP 231 mn in compensation under the terms of the settlement, which was first brokeredby the government’s investment dispute resolution committee back in 2020.
BACKGROUND- The company has been mired in a decade-long dispute that arose after a court ruling in 2011 to reverse the company’s Mubarak-era sale to private investors, claiming that the company had been undervalued. An appeal was turned down in 2013 by the Administrative Court. IMEX International acquired 94% of the formerly EGX-listed company in 2020, taking it private.
SMART POLICY- The Madbouly gov’t is sending a signal of reassurance to investors. “The state is keen to support investment,” the ministry statement reads. The government last year reached agreements to settle a number of disputes — including with Dutch Future Pipe and Italy’s Maire Tecnimont — as it looks to improve the investment environment and attract more foreign inflows.
As are the courts: The Supreme Constitutional Court’s recent decision to uphold the Appeals Against State Contracts Act, which prohibits third-party lawsuits against government contracts, will also provide additional comfort to investors.
REMEMBER- Improving investor confidence will be key to the privatization program, which aims to attract USD 40 bn in private investment by 2026 through public share offerings, stake sales to strategic investors, and expanding public-private partnerships.
SPEAKING OF WHICH- The private sector is getting a bigger voice in dispute settlement. The state’s investment dispute resolution committeewill now include a representative from the Federation of Egyptian Industries and one from the Federation of Egyptian Chambers of Commerce, according to a prime ministerial decision published in the Official Gazette yesterday. The two new members will join the finance, local development, housing, and trade ministers and committee head Justice Minister Omar Marwan as well as other government officials.
