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IFC Financing Supports Modernization of Egypt’s Omar Effendi Department Store Chain, Provide Lower Prices for Egyptian Consumers


In Cairo:
Riham Mustafa

Phone: +20 2 2 461 9150, ext. 306

E-mail:
rmustafa@ifc.org


Cairo, June 27, 2007 - IFC, the private sector arm of the World Bank Group, today signed a loan agreement with Omar Effendi, Egypt’s largest department store chain. The financing includes a $40 million loan and 5% stake to support the company’s modernization efforts.

The retail chain’s success is critical to the Egyptian economy. Omar Effendi’s stores offer affordable prices and modern shopping experiences for consumers across the income spectrum, and support the deepening of local supply chains.  With IFC’s assistance, the newly privatized company will enhance the development of the retail sector, which is a catalyst for growth in the country. In addition, Omar Effendi’s increased sales levels will impact a wide range of local textiles and other general merchandise manufacturers and suppliers.


According to Jameel Al Al Gnaibit, Chairman of Omar Effendi, “We are very happy to play a part in the turnaround of Omar Effendi, which we know is very important in the broader context for Egypt. We are also happy that IFC has joined us to support the post-privatization development of Omar Effendi as we prepare the company for the next stage. By modernizing and improving efficiencies, we plan to provide a better consumer experience for our customers.”


Michael Essex, IFC Director for the Middle East and North Africa, added,  “We are confident that our investment will enable Omar Effendi to improve its retailing practices to meet international standards and  provide better-quality goods at affordable prices for the average Egyptian consumer."


IFCs investment in the project will support the expansion and development of the retail sector in Egypt, noted Dimitris Tsitsiragos, IFC Director for Global Manufacturing and Services.  “The sector’s importance as a driver of domestic growth is clear, and the project will contribute to this growth. IFC’s involvement also demonstrates our commitment to South-South investments between emerging market nations,” he said.


Retail is a strategic sector for IFC because of its high development impact. Since entering the sector in 1994, IFC has invested in 23 companies around the world. Our retail portfolio of nearly $600 million represents 33 investments in 15 countries.


Retailers today face many challenges, such as keeping costs low and supply chain efficiencies high; responding rapidly to changing consumer tastes; expanding to penetrate new markets; and ensuring that their businesses comply with international environmental and social standards. In emerging markets, these challenges can increase exponentially—and costs can soar.


About IFC
:

IFC, the private sector arm of the World Bank Group, promotes open and competitive markets in developing countries.  IFC supports sustainable private sector companies and other partners in generating productive jobs and delivering basic services, so that people have opportunities to escape poverty and improve their lives. Through FY06, IFC Financial Products has committed more than $56 billion in funding for private sector investments and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. IFC Advisory Services and donor partners have provided more than $1 billion in program support to build small enterprises, to accelerate private participation in infrastructure, to improve the business enabling environment, to increase access to finance, and to strengthen environmental and social sustainability. For more information, please visit
www.ifc.org.

About Omar Effendi

Established in 1856, Omar Effendi is Egypt’s largest department store chain, with 82 stores. In February 2007, Saudi Arabia’s Anwal United Trading Company finalized the purchase of 90 percent of the Omar Effendi chain for $102.5 million. The government of Egypt maintains a 10 percent ownership.