CAIRO: Egyptian banks have sold over 61 billion EGP ($8.53 billion) worth of Suez Canal investment certificates as of the Monday 8 p.m. close of the Central Bank of Egypt (CBE) Monday.
In a phone interview with Al-Nahar channel, CBE Governor Hisham Ramez announced late Monday that issuing and participating banks sold 12 billion EGP worth of the Suez Canal certificates Monday.
The government issued the certificates in hopes of raising 60 billion EGP to finance a Suez Canal expansion project that includes a new 72 kilometer branch of the major world waterway parallel to the current canal. Also, six new tunnels across the canal will be built in preparation for launching a logistics hub and trade zone.
“I was assured that we (banks) would raise the required 60 billion EGP easily, but I did not expect to complete the proceeds in such a short time; around eight days,” Ramez told Al-Nahar.
The cash will be transferred to the Suez Canal Authority’s (SCA) CBE account to pay for the project expenses, Ramez detailed.
“More than $2 billion were sold at the banking sector in local currency in preparation for the subscription of the Suez Canal certificates,” said Ramez, adding that the value of the Egyptian Pound will hike due to the higher demand.
In a statement to Dream TV, head of SCA, Mohab Mamish expressed his happiness about the Suez Canal certificates’ oversubscription which he depicted as a “patriotic.”
“I am the happiest man in Egypt as the SCA has now more than 60 billion EGP in its account at the CBE, and SCA brings in revenues worth 37 billion EGP to the country annually.” said Mamish.
“Suez Canal revenues will exceed 200 billion EGP in five years,” he added.
The certificates were offered with a lifetime of five years at a 12 percent interest rate. “Individuals dominated the lion’s share of sales with 88 percent of subscriptions, while local institutions and companies made up the rest,” Ramez said yesterday.
The National Bank of Egypt, Banque Misr, Banque du Caire and Suez Canal Bank were assigned to offer the certificates to the public Sept. 4 amid an “unprecedented” turnout, according to the CBE governor.
Certificates were offered in three categories: 10 EGP, 100 EGP and 1,000 EGP. “Revenues from the 10 EGP and 100 EGP certificates will be paid after five years, while the 1,000 EGP certificates will be paid quarterly,” Ramez said at a press conference last Sunday.