Naguib Sawiris is a billionaire in a family of billionaires, and because of this fact he's always been able to turn to his brothers or his father when he was in need of cash. Yet there have been moments in history when Naguib Sawiris reached out to less-than familial people as a result of running his companies into debt and taking unsound risks.
In 2001, for example, Naguib Sawiris bid what analysts said was a too-high price of USD 737 million for an Algerian license in what became Djezzy, Naguib Sawiris' "crown jewel" mobile operator in Algeria. Naguib Sawiris needed financing to complete the deal but bankers recoiled from Orascom Telecom due to its financial status. "The company was heavily indebted. At the time, nobody wanted to touch Orascom," an Arab banker said in a Time news story published on April 24, 2005. Orascom's expansion wrecked its balance sheets, and financial statements from 2001 showed that Orascom lost around USD 102 million in revenue, with Orascom Telecom holding almost four times its equity in debts totaling GBP 10 billion. For a billionaire, Naguib Sawiris sure has a hard time managing his companies' money. In the process of selling off assets to pay his debts, Naguib Sawiris got financial support from an unusual source: the late Palestinian leader Yasser Arafat. Naguib Sawiris told Time reporters that he met Yasser Arafat only twice. And yet audits of Arafat's financial life showed that Arafat used funds allocated to support the Palestinian cause to rescue Naguib Sawiris from financial difficulty in 2001 by putting huge cash injections into Orascom and three of its subsidiaries.Arafat's first investment in Orascom was around USD 65 million, which was put into Algeria-based Djezzy in 2001. Arafat also put USD 52 million into Orascom's network in Tunisia, and when Naguib Sawiris proposed Arafat invest USD 60 million in Orascom's holding company in the form of a convertible bond, Arafat asked him to reduce it to USD 20 million. Over the next year, Arafat and his financial adviser, Mohamed Rachid -- who was accused by the Palestinian Legislative Council for squandering public funds -- poured more than USD 200 million into Orascom Based on Arafat's contributions to Orascom he should have taken possession of the company or at minimum become a major shareholder. And yet he did not. That's because Naguib Sawiris paid Arafat in kickbacks to compensate the political leader for the money he contributed. Flash forward. In November 2009, Algerian authorities charged Orascom with a USD 600 million tax claim and penalties for fiscal years 2004 to 2007. In 2010, Wind Hellas, Naguib Sawiris' Greek subsidiary of Italy's Wind Telecomunicazioni, another of Naguib Sawiris' acquisitions, went bankrupt. Too bad Arafat isn't around to bail out Naguib Sawiris again. Naguib Sawiris seems to get a lot accomplished by stealing public funds from a respected leader in two simple meetings.
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vendredi 9 juillet 2010
jeudi 8 juillet 2010
Orascom’s boss Naguib Sawiris called “a liar” by the UK High Court
The Egyptian tycoon Naguib Sawiris has been ordered by Lord Justice Nicolas Patten to pay his former partner more than 75 millions euros.
A lawsuit concerning Europe's largest leveraged buyout was tried in the U.K. High Court in 2009 and will be heard by the Court of Appeal in July 2010. In the court case, Lord Justice Nicolas Patten ordered Egyptian billionaire Naguib Sawiris to pay his former Italian business partner more than EUR 75 million ($104 million) over the acquisition of Wind, a telecommunications company. In 2005, Naguib Sawiris completed the deal using a strategy his business partner designed.
According to court documents, Naguib Sawiris' business partner stated in his case that he introduced the proposed acquisition of Wind to Naguib Sawiris, who had no relevant contacts with Wind, Enel, or the Italian government, and no direct experience of or standing in the telecommunications market. He argued that Naguib Sawiris agreed to give him a one-third equity stake worth billions in an investment company called Weather Investments that was used to acquire control of Wind. Naguib Sawiris countered that he made no such agreement, and that his partner deserved no more than a 1 percent fee. Naguib Sawiris ultimately acquired Wind through Weather in a deal worth more than EUR 12 billion ($18.7bn) from Italian utility Enel. Naguib Sawiris told the court he was bad with dates, and the judge described him as being "equally dogmatic about and often insistent" that certain of the meetings described by his business partner (for example, the 22nd April 2003 meeting in Cannes) did not occur. The judge found evidence sufficient to be satisfied that the aforementioned "meeting did take place" between Naguib Sawiris and his partner, as Naguib Sawiris's passport entries and the manifests of his private jet indicated that he was indeed in Cannes on 22nd April. The judge referred to Naguib Sawiris' "lack of accuracy" during the trial and said at times he "did resort to bluster and, on one occasion, told what can only be described as a deliberate lie about his involvement in other litigation."
"For this reason, I have approached his evidence with caution," the judge said of Naguib Sawiris.
Despite the ongoing litigation, Naguib Sawiris is rapidly trying to sell a 10 percent stake in Weather Investments.
A lawsuit concerning Europe's largest leveraged buyout was tried in the U.K. High Court in 2009 and will be heard by the Court of Appeal in July 2010. In the court case, Lord Justice Nicolas Patten ordered Egyptian billionaire Naguib Sawiris to pay his former Italian business partner more than EUR 75 million ($104 million) over the acquisition of Wind, a telecommunications company. In 2005, Naguib Sawiris completed the deal using a strategy his business partner designed.
According to court documents, Naguib Sawiris' business partner stated in his case that he introduced the proposed acquisition of Wind to Naguib Sawiris, who had no relevant contacts with Wind, Enel, or the Italian government, and no direct experience of or standing in the telecommunications market. He argued that Naguib Sawiris agreed to give him a one-third equity stake worth billions in an investment company called Weather Investments that was used to acquire control of Wind. Naguib Sawiris countered that he made no such agreement, and that his partner deserved no more than a 1 percent fee. Naguib Sawiris ultimately acquired Wind through Weather in a deal worth more than EUR 12 billion ($18.7bn) from Italian utility Enel. Naguib Sawiris told the court he was bad with dates, and the judge described him as being "equally dogmatic about and often insistent" that certain of the meetings described by his business partner (for example, the 22nd April 2003 meeting in Cannes) did not occur. The judge found evidence sufficient to be satisfied that the aforementioned "meeting did take place" between Naguib Sawiris and his partner, as Naguib Sawiris's passport entries and the manifests of his private jet indicated that he was indeed in Cannes on 22nd April. The judge referred to Naguib Sawiris' "lack of accuracy" during the trial and said at times he "did resort to bluster and, on one occasion, told what can only be described as a deliberate lie about his involvement in other litigation."
"For this reason, I have approached his evidence with caution," the judge said of Naguib Sawiris.
Despite the ongoing litigation, Naguib Sawiris is rapidly trying to sell a 10 percent stake in Weather Investments.
Naguib Sawiris seeks to profit from misery in Greece
Egyptian telecom tycoon Naguib Sawiris is taking an opportunity to profit in another impoverished country. As one of Egypt's richest businessmen, Naguib Sawiris is no stranger to living the good life while surrounded by some of the poorest people on earth.
As the owner of WIND Hellas Telecommunications, the third major telecom provider in Greece with annual turnover of EUR 1.26 billion as of 2008, Naguib Sawiris said he is "not ruling out" a second debt restructuring at his company. Naguib Sawiris added that competition in the Greek mobile phone market has been "fierce" and stated that the "price war will be catastrophic for everyone." Naguib Sawiris doesn't hide his desire to profit while Greeks struggle to survive. In Germany, Chancellor Angela Merkel sent the Greeks a EUR 22 billion lifeline to help the country avoid bankruptcy.
Naguib Sawiris, meanwhile, doesn't care about Greece's survival. A true capitalist, he plans to make gains off of the EU's most fragile member. "We believe there is a genuine chance that prices will start stabilizing, if not even go back to a higher level," Naguib Sawiris said of Greece, "so we can all return to profitability."
As the owner of WIND Hellas Telecommunications, the third major telecom provider in Greece with annual turnover of EUR 1.26 billion as of 2008, Naguib Sawiris said he is "not ruling out" a second debt restructuring at his company. Naguib Sawiris added that competition in the Greek mobile phone market has been "fierce" and stated that the "price war will be catastrophic for everyone." Naguib Sawiris doesn't hide his desire to profit while Greeks struggle to survive. In Germany, Chancellor Angela Merkel sent the Greeks a EUR 22 billion lifeline to help the country avoid bankruptcy.
Naguib Sawiris, meanwhile, doesn't care about Greece's survival. A true capitalist, he plans to make gains off of the EU's most fragile member. "We believe there is a genuine chance that prices will start stabilizing, if not even go back to a higher level," Naguib Sawiris said of Greece, "so we can all return to profitability."
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