Egypt Acquisition Tax Repeal Seen Before Orascom Telecom Deal
A law that will cancel a 10 percent acquisitions tax in Egypt will be announced before Altimo’s purchase of outstanding Orascom Telecom Holding SAE (ORTE) shares, according to the head of the Arab nation’s clearing house.
The Official Gazette will announce the law “within days,” Mohamed Abdelsalam, chairman of Egypt’s Central Clearing, Depository and Registry house, said in a phone interview today. “Usually, it should go to the president to be ratified first.”
The upper house of parliament’s economic committee canceled plans to tax stock exchange transactions, including acquisitions and dividends, Abdullah Shehata, adviser to the finance minister, said on Egyptian satellite channel CBC earlier this month. The announcement reversed a decision by the tax authority in March to impose a levy on shareholders profiting from selling shares in Societe Generale SA’s (GLE) Cairo-based unit to Qatar National Bank SAQ.
Altimo, a unit of Russian billionaire Mikhail Fridman’s Alfa Group, offered to buy out investors in Orascom Telecom on April 1. It offered $0.70 per ordinary share and $3.50 for as much as 48.1 percent of Orascom share capital, which the Egyptian regulator issued a no-objection to yesterday.
“I haven’t handed over the NSGB money to the tax authority,” Abdelsalam said, referring to National Societe Generale Bank SAE (NSGB) in Egypt. “When the law is announced, I will return the money to the people. It would have been difficult to give it back had I given it to the tax authority.”
Orascom Telecom’s shares slipped 0.2 percent to 4.63 Egyptian pounds as of 12:09 p.m in Cairo. The stock has gained 17 percent this year compared with a decline of 3.6 percent for the benchmark EGX 30 Index. (EGX30)
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