DUBAI : United Electronics Company, known as eXtra, has decided to discontinue its expansion plans in Egypt, it said on Monday, following a feasibility study.
The expected negative financial impact of shelving the expansion in Egypt is about 38 million riyals ($10.13 million), the company said in a bourse statement.
“After reviewing the feasibility of the company continuing to move forward with external expansion in the Arab Republic of Egypt, United Electronics Company announces that the Board of Directors has decided…to discontinue the company’s plans to expand in Egypt,” the statement said.
The Saudi consumer electronics company had announced plans to establish its first subsidiary outside the Gulf Cooperation Council in Egypt in 2021 with an initial investment of 1 billion Egyptian pounds ($32.41 million), which was worth $63.6 million at the time.
Egypt’s already vulnerable economy has been shaken further by Russia’s invasion of Ukraine, which rocked tourism, raised commodity prices and prompted foreign investors to pull about $20 billion out of its financial markets.
Gulf states have stepped in to support Egypt, pouring in tens of billions through various avenues, but in recent months, the tone has shifted towards a policy of tying financial investments to meaningful reform and efforts to stabilise the currency.
Companies from the Gulf have been eyeing expansion opportunities in Egypt which offers a big market for their goods and services.
($1 = 3.7506 riyals)
($1 = 30.8500 Egyptian pounds)