Obbligazioni societarie HIGH YIELD e oltre, verso frontiere inesplorate (22 lettori)

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Egypt gets Gulf help again as eyes turn to currency flexibility
Oggi 13:54 - RSF
* Billions pledged from Saudi Arabia, Qatar, UAE
* Gulf states expected to take stakes in Egyptian firms
* Egypt devalued currency amid fallout from Ukraine war

By Patrick Werr
CAIRO, April 4 (Reuters) - Gulf Arab states are channelling up to $22 billion to Egypt to help it overcome a currency crisis, the third such rescue in a decade, as analysts watch for greater exchange rate flexibility to avert future crises.

The central bank allowed Egypt's pound, which had been stable since November 2020, to drop by 14% against the dollar on March 21 after Russia's invasion of Ukraine prompted investors to withdraw billions of dollars from Egyptian treasury markets.

(news)

Last week Saudi Arabia said it had deposited $5 billion with Egypt's central bank and would make additional investments that could bring as much $10 billion in foreign currency into Egypt.

(news)

Qatar has pledged investment deals worth $5 billion, Egypt's cabinet said, and details on the purchase of stakes worth a reported $2 billion by Abu Dhabi sovereign fund ADQ are expected soon. (news)

"The flurry of Gulf investments into Egypt is reminiscent of the period after the ousting of President Morsi in 2013 when the Gulf pledged $23 billion in financial aid," said James Swanston of Capital Economics.

Saudi Arabia, the United Arab Emirates and Kuwait sent Egypt $23 billion in grants, cash deposits and fuel shipments in the 18 months after Abdel Fattah al-Sisi, then army chief and now president, led the overthrow of Islamist president Mohamed Mursi in 2013.

That aid allowed Egypt to put off an IMF accord and spend more on supporting the currency, which came under severe pressure after the 2011 uprising that ended Hosni Mubarak's 30-year rule.

During a second currency crisis in 2016 Egypt devalued the pound by half, and Saudi Arabia deposited about $3 billion and the UAE $1 billion with the central bank, setting up an IMF accord in November 2016.
Egypt, which continued to grow during the coronavirus pandemic but saw its current account deficit widen as import costs rise and tourism receipts dwindle, said last week it was in talks with the IMF for potential funds and technical support to hedge against the effects of the latest crisis.

Last month Sisi visited Saudi Arabia and hosted the UAE's de-facto ruler in Sharm el-Sheikh, as Egypt reinforced ties with Gulf allies and participated in an emerging Arab-Israeli axis.

(news)
(news)


HARD ASSETS
This time around, Gulf countries seem to be toughening conditions by seeking hard assets in addition to central bank deposits, a demand that could increase the cost to Egypt, analysts said.

Inflows from Cairo's Gulf allies would reassure the IMF and encourage foreign investors to return to Egypt's high-interest, short-term treasuries, leaving the country still vulnerable to global financial shocks, said Amr Adly, an assistant professor at the American University in Cairo.

"This is a message that we have rich friends, and that these rich friends are willing to give up money in times of need," he said.

Egypt's currency could come under more pressure as higher global commodity prices feed into inflation, putting even more strain on the pound, other analysts said.

"We continue to see a more flexible FX regime as critical to Egypt's long-term external account vulnerabilities," HSBC said in a note.

"But with the bilateral inflows providing relief and seemingly having no policy conditions attached to them, the pressure for substantive change to the FX regime may be set to fade," it added.

On the day of the devaluation, the central bank's Monetary Policy Committee stressed "the importance of FX flexibility to act as a shock absorber".

Egypt's pound was at 18.22 to the dollar on Monday, just above the 18.17 to the dollar it fell to on March 21.

Monica Malik of Abu Dhabi Commercial Bank said that because Egypt had exceeded its IMF borrowing quota, any new assistance could involve funding from other multilateral institutions and bilateral components such as Gulf Cooperation Council countries.

"The GCC support measures are likely to be supportive for Egypt meeting the IMF's requirement under its exceptional access criteria," she said.

(news)
Saudi Arabia deposits $5 billion in Egypt's central bank - SPA
(news)
Egypt, UAE, Israel discuss economic challenges as Iran looms (news)

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(Additional reporting by Aidan Lewis, Saeed Azhar and Yousef Saba; Editing by William Maclean)
(([email protected]))
 

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News Release Issued: Apr 4, 2022 (8:02am EDT)

To view this release online and get more information about Talen Energy visit: Gary Wojtaszek Joins Board of Talen Energy Supply as Independent Director

Gary Wojtaszek Joins Board of Talen Energy Supply as Independent Director
Former CyrusOne CEO will support Talen's clean energy and digital infrastructure transformation, balance sheet restructuring process and enterprise value growth initiatives

THE WOODLANDS, Texas, April 4, 2022 /PRNewswire/ -- Talen Energy ("Talen" or "the Company") announced today that Gary Wojtaszek, former CEO of CyrusOne, a $15 billion data center technology real estate investment trust (REIT) that serves Fortune 1000 companies worldwide, has joined the Talen Energy Supply ("TES") Board of Directors as an independent director. Mr. Wojtaszek joins Carol Flaton, who was appointed as independent director on the TES Board in November 2021.

"I am pleased to welcome Gary to the TES Board," said Alex Hernandez, Chief Executive Officer, President, and Director of TES. "Our Company is at an important inflection point as we transition from an operational turnaround to strategically re-positioning Talen for long-term value creation. Talen's transformation and liability management initiatives create significant opportunities for growing Talen's enterprise value. We are actively working to address the balance sheet with capital to drive the long-term success of the Talen-Cumulus platform and our people," continued Hernandez. "Gary's leadership capabilities, financial acumen, track record of value creation, and digital infrastructure industry experience will bring a valuable perspective to the Board during this critical time."

"Talen is poised to re-position itself for long-term value creation as a clean energy and digital infrastructure platform. There are many parallels to draw between Talen's current strategy and my 12 years at CyrusOne. We had humble beginnings as a small $500 million enterprise value business that spun out of the legacy Cincinnati Bell telecom utility. Nearly a decade later, we had transformed the business to the 3rd largest data center platform globally, resulting in the eventual sale of CyrusOne for $15 billion this year," said Wojtaszek. "I have followed Talen's progress closely over the last two years and have high confidence in Alex and his team as management executes this next chapter. I also look forward to collaborating with Carol, the Board and the Company's key stakeholders to address the balance sheet and position the Company for the future," Wojtaszek continued.

Mr. Wojtaszek has extensive experience founding, growing, leading, and monetizing private and public companies of scale. From August 2011 to February 2020, he served as President and Chief Executive Officer of CyrusOne, Inc., a real estate investment trust that builds and manages carrier-neutral hyperscale data centers globally. Prior to CONE, Mr. Wojtaszek served as chief financial officer and board member of Cincinnati Bell Inc., where he had responsibility for the data center business and oversaw CyrusOne's successful creation, spin-off, and IPO.

Before joining Cincinnati Bell in July 2008, he was senior vice president, treasurer, and chief accounting officer for the Laureate Education Corporation from 2006 to 2008 helping with the leveraged buyout of the company to KKR. He worked at Agere Systems, the semiconductor and optical electronics communications division of Lucent Technologies, from 2001 to 2008, which was subsequently spun off through an IPO. While at Agere Systems, Mr. Wojtaszek worked in a number of senior finance positions, helping with the restructuring and repositioning of the company following the 2001 financial crisis. Mr. Wojtaszek started his career in the General Motors New York treasury group and joined Delphi Automotive Systems as the regional European treasurer in connection with the initial public offering and spin-off of Delphi Automotive Systems from General Motors.

Mr. Wojtaszek currently serves on the Board of GDS Holdings Ltd., an integrated provider of high-performance data centers based in China and serving the Asia Pacific region. He also is a Board member of Quantum Loophole, developer of master planned data center communities in the U.S, and Poema Global and Infra Tech Partners. Mr. Wojtaszek serves as an industry advisor to global investment firm, The Carlyle Group, Inc. and Actis, a leading global investor in sustainable infrastructure.

Mr. Wojtaszek is the founder and CEO of Recreational Realty, which designs, builds, and operates premium class facilities geared towards the needs of the recreational vehicle enthusiast.
 

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