January 15, 2012

Billionnaire Al-Amoudi to buy Ethiopian Airlines?

What’s Access Capital Upto?

by Ethiopian Recyler | A report on Monday, 9 January 2011 in CapitalEthiopia talked about Mr. Gebeyaw Takele buying back Debre Birhan Spring Water Company “at a significantly higher [and undisclosed] price” from Access Capital.

Yes the same Access Capital under the chairmanship of Ambassador Dr. Berhane Ghebray who this month put out the recommendation to sell off Ethiopian Airlines [EAL] and four other state-owned companies and Information Minister Bereket Simon spoke in defense of protecting the companies. This may be Act I. What would Act II be like? Sell followed by a public uproar and a couple years later another sell to the state by which time the thief has gotten away with few change??!!

Why do these transactions sound more and more like the situations that led to the global financial crisis. You borrow and buy “underperforming” companies, reorganize and sell for more profit. Questions abound. Was there collusion? Who are the stakeholders? Was the deal ethical? Was there a real change and, if so, who are the real beneficiaries?

Is the sale of EAL a done deal? Are the four other state owned enterprises [Shipping, Commercial Bank, Insurance, and Telecom] simply there as cover for snatching the jewel in the crown, that is, EAL? We have known for a while now that especially EthioTelecom has been embroiled in corruption in which the Prime Minister’s wife is implicated. So are there pointers that EAL will go the way of, say, the Spring Water Company?

Let us first go back to the year 2010 and revisit the handing over of power at the EAL. Here is Board Chair and Foreign Minister Mesfin Seyoum’s statement:
“Since Ato Girma has been serving Ethiopian for the last 37 years, the time has now come for his retirement …and accordingly, Ato Tewolde Gebremariam has been appointed as the CEO – Designate of Ethiopian Airlines until December 31, 2010, after which period of time he will assume the responsibility of the Chief Executive Officer of Ethiopian Airlines.” [15 September 2010]

And the news of selling off EAL came a little over a year of Girma Wake’s retirement. What is intriguing is that the new CEO Tewolde reported a 40% revenue growth in July 2011 [six months after taking office].
Tewolde has given several interviews so far and it appears that labor issues could be the one thing that may require taking radical measures. And it can’t get more radical than privatizing state-owned EAL. Access Capital could be in cahoots with the ruling party.

And someone is ready to pounce on their prey. That is, they come in to reorganize [read: fire few labor leaders/whistleblowers and promote “some” to key positions to streamline EAL with the ruling party and, there you go, sell back to the state for “undisclosed and significantly higher price.”].

The moral of the scenario?: EAL may not be “underperforming” but labor is pain and it is no crime to profit in the process of relieving pain. And who could that lucky guy be to buy EAL? Well, in the last post we suggested foreign venture capitalists.

And we forgot to include the Saudi Al Amoudi. We apologize for that. After all, he is bosom buddies with the Prime Minister and his wife and the right hand man to the Prime Minster and his wife, even Information Minister Bereket Simon. We had said the relationship is so tight it will require a joint effort by the Mossad, the FBI and Scotland Yard to crack it open. Or may be the agencies already know what is going on but are not talking now. And of course the Saudi Al Amoudi is there to work for the ruling party [as in his latest activity to create acrimony between Ethiopians in North America] and play a benefactor to Ethiopia, not forgetting to greatly benefit himself!

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