Middle East Business News Review – 16 August

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Photo – Vahid Salemi/AP

Middle East Business News Review:  Top Business News from the Middle East & North Africa

Rio Tinto, Areva bag $3 billion UAE nuclear contracts

The Emirates Nuclear Energy Corporation has awarded fuel supply contracts worth about $3 billion to six international companies, including, Rio Tinto and Areva SA, to supply fuel for the country’s four planned nuclear reactors, Emirates Nuclear said in an e-mailed statement on late Wednesday.

Rosatom Corp.’s nuclear fuel trader OAO Techsnabexport, also known as Tenex, and Areva SA (AREVA) will supply uranium concentrates, conversion services and enrichment services, according to the statement.

Emirates Nuclear said in a statement that it expects to return to the market at various times to ‘take advantage of favourable market conditions’ and to strengthen its security of supply position.

Etihad interested in Ryanair’s Aer Lingus share

Etihad Airways has expressed its is interested in buying Ryanair’s 30% stake in Aer Lingus, reports coming from Abu Dhabi said on Thursday.

The airline’s CEO James Hogan told Bloomberg he would be “very happy to have that discussion” while adding that Dublin has been a strong and profitable route for the Abu Dhabi-based airline.

Etihad already owns 3% of the Irish flag carrier, and says it has already had talks about buying the Irish Government’s 25% stake in it. The UAE’s national flag carrier has made investments in several other airlines, including Air Berlin, Air Seychelles and Virgin Australia Holdings.

Iran, Korean banks in rare financial spat

Iran’s central bank has threatened to close its Korean currency-based transaction settlement accounts opened at two South Korean banks amid a spat over higher deposit rates on the accounts, sources said Thursday.

According to industry sources, Iran has notified two local state-owned banks – Woori Bank and the Industrial Bank of Korea (IBK) – of not using the Korean-currency accounts, estimated at around 5 trillion won ($4.42 billion), anymore mainly due to lowly set deposit rates on the accounts and asked the Korean government to find alternatives.

In 2010, South Korea agreed with Iran to set up a won-based transaction settlement arrangement for bilateral trade, mainly to facilitate the crude oil imports, and insisted that the move did not go against international sanctions imposed by the US and EU to punish Iran for its nuclear ambitions.

IMF coming to Egypt with $4.8 billion loan proposition

An International Monetary Fund delegation, headed by Christine Lagarde, will visit Egypt to discuss the possibility of a bigger-than-expected $4.8 billion loan, its finance minister said on Thursday. The IMF confirmed in a statement that Lagarde would be present and said the delegation’s visit would start on 22 August.

“Her visit is a reflection of the IMF’s continuous commitment to support Egypt and its people during this historic period of transition,” it said.

During 18 months of political turmoil since the overthrow of dictator Hosni Mubarak, successive Egyptian governments negotiated with the IMF to secure emergency funding that various officials had put at $3.2 billion.

Algeria to receive EU funds to protect environment

The European Commission announced on Thursday it will allocate €34 million ($41.73m) to fund environmental programmes in Algeria. Under the programme, the Algiers’ coastal region will be protected and efforts will be made to tackle the impact of climate change at the heart of the country’s development policies.

The ambitious environmental programme in Algeria has been launched by the European Commission which would partner with Algerian authorities to focus on protecting the Algiers coastal region.

Qtel offers $2.2bn for Wataniya stake

Qatar Telecom (Qtel) is offering US$2.2bn to buy the remaining 47.5% stake it does not already own in Kuwaiti telecom company Wataniya as the state-owned operator eyes acquisitions to ward off threats from rivals.

The former state monopoly, which already owns 52.5% of Wataniya, will pay KD2.6 per share, an 18% premium to Wataniya’s last traded price, through a tender offer open to shareholders.

Qtel has been raising stakes in its subsidiaries, taking advantage of the gas-rich Gulf state’s healthy financial position at a time when other large telecom firms are shying away from deals.

Omani investor takes 25% in Bulgaria’s Investbank

The CEO of Oman’s Shanfari Group of Companies has stepped in to bail out Bulgaria’s Investbank, buying a 25% stake in the lender in return for BGN50m ($31.50m) in a deal approved on Wednesday.

Bulgaria’s central bank had asked Investbank, majority controlled by local company Festa Holding, to boost its capital by BGN50m to ensure its proper operation as the quality of its assets worsened.

Banking in Bulgaria, the EU’s poorest country by income per head, has lagged behind swift development of lenders elsewhere in eastern Europe which has generated huge profits for Italy’s Unicredit and Austria’s Raiffeisen among others.

SR18 billion investment in hotel infrastructure in Makkah

A report issued by the Saudi Commission for Tourism and Antiquities (SCTA) said that a total of 100 towers are currently under construction near the Grand Mosque in Makkah. Once all the projects are completed, over 24,480 hotel rooms will be added to the city’s capacity.

Salah Al-Bakheet, Deputy Chairman for Investments at the SCTA, said the total investment made in the city’s hotel infrastructure over the next two years will exceed SR18.3 billion.

Al-Bakheet drew attention to the fact that these projects are being carried out to facilitate the state’s plans to increase the number of Umrah and Haj pilgrims. Moreover, he said the projects will increase competition and keep prices low, particularly during the peak season.

Qatar-funded film to open Venice Film Festival

Hollywood political thriller ‘The Reluctant Fundamentalist’, starring Kate Hudson and Kiefer Sutherland, and financed by the Doha Film Institute (DFI) will be the opening film at the 69th Venice International Film Festival, organisers have confirmed.

Directed by Oscar-nominated Indian filmmaker Mira Nair, the production is based on the best-selling novel of the same name and is an international political thriller following a young Pakistani Wall Street executive who gets embroiled in a hostage crisis.

The red carpet world premiere will be presented by the DFI and will take place in the Italian city on 29 August.

Cash-strapped Morocco is no hurry to import soft wheat

The Moroccan government, facing its biggest wheat import campaign this year in three decades while hard currency reserves are dwindling, said it would not tap international soft wheat markets before the bulk of its domestic harvest is sold.

The north African country, which has received no bids in two tenders this week for European Union and U.S.-origin soft wheat, can keep stocks at a comfortable level of 1.75 million tonnes by end-August, enough to cover four months of milling needs, the Agriculture Ministry said in a statement.

By the end of the first week of August, farmers had sold 1.39 million tonnes of the 2.74 million tonnes of soft wheat expected to be harvested this year, the ministry added on Thursday.

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