FILE - Central Bank of Egypt Headquarters in Cairo
CAIRO - 10 February 2020: Deputy Governor of the Central Bank of Egypt Gamal Nagm declared the board issued a decree on Sunday extending the grace period of stumbling factories as part of an initiative exempting those enterprises from interest rates and rescheduling their debts.
Nagm made the statement in a hearing session held by the Industry Committee at the House of Representatives on the initiative launched by CBE to finance the private industrial sector and alleviate the crisis of stumbling factories.
Those businesses are exempted from interest rates that they have not paid yet and 50 percent of the amount due excluding the portion that had been paid back by investors. The payback can also be in the form of cash or in kind.
The deputy governor pointed out that the execution of all court sentences against stumbling factories are being suspended and that if any of those has been subject to confiscation, would get the collateral returned once an agreement is reached with banks to reschedule debts.
“Those who are not part of the initiative can still negotiate with banks and reschedule their loans. Nevertheless, they will not enjoy the 50 percent discount on the remaining due amount...The repayment agreement between investors and the banks are submitted to the central bank for review and approval if the conditions apply. As such, all judicial measures against stumbling factories are stopped,” Nagm stated.
The deputy governor revealed that 101 factories applied to become part of the initiative as they got loans worth LE18.3 billion. There are 45 mega factories that borrowed LE36.9 billion but did not join the initiative as their debts stand at more than LE10 million.
Eighty-six factories were just facing trouble paying back interests, which were either written off or rescheduled. Ninety-three others got their due amounts worth LE10.6 billion annulled while 89 factories rescheduled their debts.