Following a feasibility study, United Electronics Company, known as eXtra, announced that it has decided will no longer pursue its expansion plans in Egypt.
The anticipated financial impact associated with canceling the expansion in Egypt is around 38 million riyals ($10.13 million), according to 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.
Furthermore, 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.
Moreover, 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 stabilize the currency.
Companies from the Gulf have been eyeing expansion opportunities in Egypt which offers a big market for their goods and services.
