VZCZCXYZ0004
RR RUEHWEB

DE RUEHEG #6501 2951513
ZNR UUUUU ZZH
R 221513Z OCT 06
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC 2165
INFO RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC 0212

UNCLAS CAIRO 006501 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR NEA/ELA, NEA/RA, EB/IDF/OMA 
USAID FOR ANE/MEA MCCLOUD AND DUNN 
USTR FOR SAUMS 
TREASURY FOR NUGENT AND HIRSON 
COMMERCE FOR 4520/ITA/ANESA/TALAAT 
 
E.O. 12958:  N/A 
TAGS: EAID ECON EINV EFIN EG
SUBJECT: BANK OF ALEXANDRIA DEAL TO BE SIGNED OCTOBER 31 
 
 
Sensitive but unclassified.  Not for Internet distribution. 
 
¶1.  (SBU) GOE officials told econoff that the contract for sale of 
80 percent of the shares of Bank of Alexandria (BOA) to the Italian 
bank SanPaolo IMI would be signed on October 31.  The terms of the 
contract require Sanpaolo to deposit the $1.6 billion cost of the 
purchase into an escrow account held by the Egyptian Ministry of 
Finance (MOF) within 5 days.  Central Bank of Egypt (CBE) Sub 
Governor Tarek Kandil told econoff that CBE's board of directors 
would approve the contract at its regular biweekly meeting November 
¶7.  Kandil predicted that the final sale, which will take place on 
the Cairo and Alexandria Stock Exchange, would be complete by the 
end of November.  The timeframe depends, however, on the Bank of 
Italy, which must also approve the final sale.  Kandil said that 
Sanpaolo was eager to conclude the sale quickly, and had already 
submitted a request for approval to the Bank of Italy. 
 
¶2.  (SBU) MOF officials confirmed Kandil's statements, and told 
econoff that MOF had agreed with Sanpaolo to expedite the final 
sale, as both sides wanted swift completion of the transaction.  The 
GOE badly needs the $1.6 billion in revenue from the sale while 
Sanpaolo needs to quickly invest liquidity generated by its recent 
merger with Banca Intesa. 
 
¶3.  (SBU) Comment:  While the GOE's anticipated timeframe for 
completion of the BOA deal is somewhat ambitious, it is not 
unrealistic.  The lengthy period the GOE granted the short listed 
bidders to conduct due diligence on BOA and prepare final bids seems 
to have paved the way for smooth completion of the sale.  End 
comment. 
RICCIARDONE