Decision time for Arab African affiliate

06 January 1995

A decision on the future of Arab Multinational Finance Company (Amfco) is expected when the Luxembourg-based holding company's board meets in the new year, Cairo bankers say. Amfco retains a portfolio of shares in Arab financial institutions and other companies but has been dormant for several years after accumulating substantial debts in the late-1980s.

Amfco is owned by institutions including the Cairo-based Arab African International Bank (AAIB) and Universal Investment & Development Company. Its holdings include the Bahrain-based Arab Multinational Investment Company, the Grand Cayman-based Arab Capital Corporation and the Bahamas-based European Hotel Management Company. Other holdings include Tunis International Bank and Alexandria Printing & Publishing House.

In June, the Amfco board said it was ready to close the company, which last presented full accounts in 1985. However, legal liquidation procedures have not gone ahead and a recapitalisation of the company is not ruled out, bankers say.

Amfco's capital has been reduced to $50,000 from $30 million pending liquidation or recapitalisation. This allowed Amfco to reduce its debts to institutions led by AAIB.

Egyptian lawyer Amer Abd Elhamid has been appointed to head the restructured board. The full extent of Amfco's debts are not yet known but are estimated to be about $74 million. Part of the company's documentation was held in Kuwait, where it had a representative office, and was lost during the Iraqi invasion of 1990, according to a report presented to the Luxembourg authorities.

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