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Brooke F Adams  09/12/2006 01:59:07 PM  From  DB/Inbox:  Brooke F Adams

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UNCLAS        TRIPOLI 00475

SIPDIS
CXCAIRO:
    ACTION: ECON
    INFO:   PA POL IPS FCS FAS DCM AMB AID MGT

DISSEMINATION: ECON
CHARGE: PROG

VZCZCCRO012
RR RUEHEG
DE RUEHTRO #0475/01 2501427
ZNR UUUUU ZZH
R 071427Z SEP 06
FM AMEMBASSY TRIPOLI
TO RUEHC/SECSTATE WASHDC 1178
INFO RUEHTRO/AMEMBASSY TRIPOLI 1332
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHEG/AMEMBASSY CAIRO 0408
RUEHVT/AMEMBASSY VALLETTA 0096
RUEHRO/AMEMBASSY ROME 0197
RUEHTU/AMEMBASSY TUNIS 0525
RUEHAS/AMEMBASSY ALGIERS 0299

UNCLAS SECTION 01 OF 02 TRIPOLI 000475 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ECON EINV PREL LY
SUBJECT: LARGEST LIBYAN INVESTMENT COMPANY DEVOTES CAPITAL RESOURCES 
TO US FOR FIRST TIME IN 20 YEARS 
 
 
¶1. (SBU) SUMMARY.  The Chairman & General Manager of Libya's 
largest investment company, the Libyan Foreign Investment 
Company (LFICO),  recently met with Econoff to discuss the 
company's history and future prospects for investment.  LFICO, 
government owned and established in 1981,  is moving away from 
its previous focus on investments in Africa and turning more 
towards the Middle East, Europe, and even the US. The company's 
portfolio, while diverse, has an emphasis on the hotel and 
agriculture industries, especially in neighboring Egypt. This 
month, LFICO, part owner of the Maltese-based Corinthia Hotel 
Group, formally announced its first major post-sanctions deal 
with a US company, Dallas based Wyndham Hotel Group, and is also 
investing in bio-diesel plants in Houston.  END SUMMARY. 
 
 
COMPANY BACKGROUND 
 
¶2. (SBU) Econoff reviewed LFICO's current activities and future 
plans with General Manager and Chairman Abdulfatah Sharif on 
August 16th. Established in 1981 under the name Libyan Arab 
Foreign Investment Company (LAFICO), the company is wholly owned 
by the General People's committee that serves as the equivalent 
of a Ministry of Trade and Economy and managed by a board of 
directors. The Libyan Arab Foreign Bank (LAFB), the parent of 
the LFICO, is controlled by Libya's central bank.  Approximately 
200 LFICO employees work in the company's headquarters in 
Gharyan, a desert town 80 miles south of Tripoli, while 
approximately 100 operate in overseas offices located in Cairo, 
Valletta, Rome and other capitals.  LFICO operates in some ways 
like other Jamahiriya entities, with Libya based employees 
receiving a relatively modest government salary, while those 
posted abroad are compensated with higher wages in dollars or 
euros.  Sharif, an economist by training, started with the 
company in the late 1980's and worked his way up to his present 
position. Sharif said the company, with a present capital of US 
2 billion, is moving away from the trend of investing in African 
companies, a portfolio now being managed by its subsidiary, the 
Libyan African Investment Company. 
 
EMPHASIS ON HOTEL AND AGRICULTURE INDUSTRIES 
 
3.(SBU) Sharif described LFICO's investment portfolio as 
diverse, but primarily centered around the hotel and agriculture 
industries. In neighboring Egypt, where LFICO maintains 22 full 
time employees, the company as a heavy stake in the hotel 
industry, owning 15% of the Conrad, 20% of the Ramses Hilton, as 
well as shares in the Sheraton and JW Marriott.  It recently 
purchased 100% of the high end Four Seasons Hotel in Sharm 
Al-Sheikh. Sharif characterizes the hotel industry as "less 
risky than manufacturing," a motivating factor in their 
investment strategy. The company also own approximately 30,000 
acres of agricultural land in Egypt, mainly utilized for 
agricultural investment projects and cultivating fruits and 
vegetables.  LFICO boasts an assortment of other investments 
throughout Europe, North Africa, and China, where it has 
invested in the textile and electronics industries.  In Europe, 
much of its capital is focused on Italy, its former colonizer, 
where it purchased 2% of Fiat. In 2001, LFICO bought 7.5% of 
Italian soccer club Juventus, and Qadhafi's soccer aficionado 
son Al-Saadi sits on the board.  LFICO also owns 15% of Tamoil 
Europe and has over 500 million USD worth of real estate 
investments in the UK. 
 
US INVESTMENTS 
 
¶4. (SBU) With the lifting of US sanctions on Libya, LFICO has 
started to reenter the US market, where its assets were frozen 
in 1986.  In what Sharif characterizes as LFICO's most 
significant post-sanctions investment in the US, on August 10, 
the Maltese based Corinthia Group of Companies, 47% owned by 
LFICO,  announced an agreement with the Wyndham Hotel Group to 
jointly manage 15 existing Corinthia hotels under the Wyndham 
and Ramada brands in the Europe, Middle East, and Africa 
regions.  According to the manager of the Corinthia in Tripoli, 
the location of the US Embassy, the details of the agreement 
have yet to be finalized, but many four-star Corithia Hotels in 
Europe and the Middle East will take on the Ramada name,  while 
some five star hotels will take on the Wyndham logo. The 
companies will also start to merge hotel management services, 
sales and marketing teams. LFICO also recently purchased 50% of 
a bio-diesel plant from the  Geogreen company operating out of 
Houston, Texas. According to Sharif, Geogreen and LFICO plan to 
open several new bio-diesel plants in Texas over the next two 
years. LFICO is also actively investing in the NYSE, NASDAQ, and 
Chicago Exchange Market. 
 
¶5. (SBU) COMMENT.    Prior to the ending of sanctions, company 
management had been elusive with western media about sharing 
information on its investment portfolio. Econoff provided Sharif 
with the contact information for appropriate interlocutors at 
the Department of Commerce, and encouraged him to get in touch 
with them regarding any inquiries they might have on investment 
in the US . END COMMENT. 
GOLDRICH