Abraaj boosts Egypt investment

Abraaj boosts Egypt investment

Abraaj Capital, the Middle East's largest private equity firm, has boosted investment in Egypt despite the country's political turmoil and is now eyeing the acquisition of an oil services firm, its chief executive said in remarks published on Tuesday.

November 1, 2011 12:13 by Reuters

“We are currently studying the acquisition of a firm in the field of petroleum services,” Mustafa Abdel-Wadood said in an interview published in Egyptian newspaper al-Shorouk.

Dubai-based Abraaj manages assets of around $6 billion. Its total investments in Egypt are around $1 billion, Abdel-Wadood said, adding Abraaj has stakes in Egyptian groups Orascom Construction Industries and Al-Borg Laboratory.

“Our total investments in Egypt in 2011 reached around $50 million, the highest annual investment size in the country since 2009,” Abdel-Wadood said.

Egypt saw an exodus of investors in the wake of the uprising that toppled President Hosni Mubarak early this year.

Street protests, a widening budget deficit, a murky political outlook and legal challenges to state land sales are still discouraging foreign investment.

Abdel-Wadood said Abraaj had taken a more cautious strategy in Egypt since the uprising, focusing on sectors serving a wide consumer base, and said he expected Egypt’s pre-uprising GDP growth of 5-6 percent would not return for three years.

“The future of Egypt’s economic growth in the short term is not clear … This leads to difficulty in placing investment strategies,” Abdel-Wadood said. “Prolonging the transitional period will add to the uncertainty.” (Reporting by Shaimaa Fayed; Editing by Dan Lalor)