Ismail Osman has been appointed an adviser to Housing, Utilities & New Communities Minister Mohamed Ibrahim Soliman. The ministry represents the state’s ownership of Arab Contractors. The company was nationalised in the 1960s.
The new chairman and chief executive is Ibrahim Mahlab, who was previously deputy to Ismail Osman, and has spent his entire working life with Arab Contractors. The company’s board was changed at the end of 2000, with the introduction of four new members from the banking sector to help tackle the problem of Arab Contractors’ heavy debt burden. The appointment of Mahlab has been accompanied by a fresh change in the board’s composition, restoring majority representation to executives of the company itself.
‘Arab Contractors executives now make up 10 of the 16 board members,’ Mahlab told MEED on 3 December. ‘We see this a sign of the owner’s confidence in the company’s future.’
Mahlab said the company’s total debt had been reduced to £E 2,400 million ($565 million), from £E 3,572 million ($840 million) at the end of June 2000. The reduction had come about through government clients meeting arrears and through negotiations with creditor banks.
Osman had said at the time of the earlier restructuring that it was essential for banks to capitalise a portion of the company’s debt so as to release working capital (MEED 12:1:01). Mahlab said discussions with banks on this point are at an advanced stage.
Mahlab said the company is well on the way to overcoming its financial problems, and has ambitious plans for the future. ‘Arab Contractors should be one of the biggest 20 or 30 companies in the world,’ he said. The New York-based Engineering News Record ranks the company 81st in its list of the top 225 international contractors in 2000.
‘We are well positioned to do lot more work outside Egypt, in particular in the construction of bridges,’ said Mahlab, who has himself carried out several bridge projects for Arab Contractors. ‘We have built up a lot of experience in this area, and we have a lot of equipment at the ready.’
He said all the foreign branches of the company are committed to completing projects under way. However, the position of those branches that are incurring losses will be closely scrutinised.