[Intl-tobacco] Philip Morris , BAT sniff at Egypt's Eastern

[Robert Weissman]

Philip Morris , BAT sniff at Egypt's Eastern
Source: Reuters, Wednesday, 12/6/00

CAIRO, Dec 6 (Reuters) - Tobacco giants Philip Morris and British American
Tobacco have each voiced interest in becoming a strategic investor in
Egypt's Eastern Co , an official close to privatisation efforts said on
Wednesday.

``Philip Morris and BAT informed us several months ago that they would be
interested in becoming an anchor investor, but they were waiting for
details about how large a stake would be privatised this time,'' an
official at the Holding Company for Chemical Industries, which includes
Eastern, told Reuters.

The Egyptian government has a majority stake in Eastern, which is in the
process of being privatised.

The official said neither company had made a formal bid since the
government announced last month that it would sell a new 15 percent
tranche in the Egyptian tobacco group, rather than 11 percent as
originally planned.

``We have not had an official approach from these two companies since the
news was announced,'' the official said, declining to give further
details.

Asked to confirm BAT's interest in Eastern, a spokesperson said the
company had no comment. Officials at Philip Morris could not be reached
immediately for comment.

Egypt has already sold a 34 percent stake in Eastern for some 549 million
Egyptian pounds ($143 million) as part of a broader privatisation
programme, Egyptian stock exchange statistics show.

According to ING Barings, Eastern holds a ``monopolistic position'' in
Egypt's cigarette trade with a market share of 85 percent.

In the year to end-June 2000, Eastern increased net profit to 266.07
million Egyptian pounds from 243.24 million a year earlier on sales of 2.0
billion pounds versus 1.9 billion.

At 1055 GMT, Eastern was trading 0.09 percent higher at 64 pounds in an
overall firmer Egyptian market.