Cedar Oxygen to Support the Industry: What Fest Investments

Cedar Oxygen to Support the Industry: What Fest Investments
Cedar Oxygen to Support the Industry: What Fest Investments

Leah Al-Azzi wrote in Al-Akhbar: The central bank invested $ 175 million in the Cedar Oxygen Fund, betting that it would be a step that would encourage foreign investors to put money as well. The “Central” hook was taken empty, after three months had passed since the fund was launched, without any additional dollar entering it. Neither the “foreigners” want to “help” Lebanon without political guarantees, and neither do the industrialists understand the principle of the fund’s work

Where did the Cedar Oxygen Fund for Industrial Lending become, which was launched on July 29, and the Banque du Liban announced an investment of 175 million dollars in it? Three months later, the fund that is expected to “positively affect the economy of Lebanon and its society” – according to the Central Bank statement at the time – was the one that was negatively affected by the internal situation, and the absence of “confidence” of foreign investors in the Lebanese system to lend it more money, and a number of expatriates declined. The Lebanese wealthy owners expressed their pledges to participate in the investment fund. The amount has not yet exceeded the $ 175 million, which is considered a “discouraging” indicator about its future, especially after its founders set themselves the goal of attracting $ 750 million, which can be turned into $ 3 billion, if the amount is run four times a year. It is surprising that the Central Bank has decided to play the role of a player in the financial markets, “adventurous” to invest 175 million dollars of depositors’ money in an unsecured investment project, which is “moaning” about the lack of liquidity in foreign currencies, and is looking for a way to attract dollars into the system. The Lebanese banker, instead, withdrew dollars from his accounts abroad, to pump them into a box based in Luxembourg. The problem is not with the investment, but rather in its timing, circumstances and based on any vision that has been made. However, Governor Riad Salameh did not determine his choice according to these accounts. Rather, he was controlled by his “obsession” with securing dollars to buy raw materials for industries that have an export market. The sales proceeds in Lebanon are re-pumped, which is reflected positively in the balance of payments figures (the difference between the funds that enter and those That goes out of the country). And because he has “a project that he is trying to succeed, he decided to be the first investor in order to encourage others to join him, and there is no fear of any loss that might arise, as long as he is able to recover the money,” he also transfers stakeholders in the financial sector, defending the project. The fund manager, Alexander Jihad Harqous, confirms that: “The Banque du Liban can recover the investment, with prior notice and within transparent and internationally approved principles.” Harkous is the CEO of “Cedar Oxygene”, and he specializes in everything related to “Portfolio Management”, and has experience in global financial markets..

Work on “Cedar Oxygen” began in early 2020, and the first date for its launch was set in April 2020, before it will be carried over to July of this year. Time delays, a reflection of fundamental obstacles. The decision was taken during the first session of the Central Council of the New Banque du Liban, and the fourth deputy governor, Alexander Muradian, was tasked with following up. “The discussion about it was quick, and approval was given to it in a manner similar to a recommendation, on the basis that the agreement between the Ministry of Industry, the Industrialists Association and the Bank of Lebanon took place before the start of the work of the Central Council,” according to the sources of the latter. The beginning of the observations recorded by expatriate financial experts, that the establishment of the fund was done by mutual consent, wondering about the failure of the Banque du Liban to solicit bids, “and the opening of competition to obtain the best project on appropriate terms, as long as the Central Bank, which suffers from negative reserves of nearly 54 million dollars, has used funds Depositors to invest in a private limited liability corporation. In addition, an annual administrative fee of 1.75% is withdrawn from the total amount in “Cedar Oxygen” annually, meaning that if no amount is added to the $ 175 million, approximately three and a half million dollars will be withdrawn from it annually in each period of operation of the fund. ” This means that the depositor invested dollars shrink. As for the “problem” of “Cedar Oxygen”, it is contrary to what appeared as a “solution” to secure financing for Lebanese manufacturing companies that would lead to “reducing poverty and creating jobs” (as stated on the project’s website), and in a way that suggests that the whole industrial sector will benefit from Facilities, it turns out that the target group is exclusively those that do not suffer from financial difficulties, and those who can secure 30% of the loan value in cash dollars. Harqous responds to “Al-Akhbar” that setting up a program to help the entire sector in Lebanon is “the responsibility of the Ministry of Industry. We do not favor any industrialist over the other, but we study the files of the resulting industries.” We want to help build a productive, not rentier economy, and we are concerned with protecting the money of investors, especially the Central Bank, because it is the money of the Lebanese people».

Why was the project bound by mutual consent? Harqous responds: The Central Bank was looking internally, and with several companies, for a way to solve the industrialists ’crisis. After appointing the governor’s four deputies, Harkous met with them, “We signed a contract with the Central Bank that allows him to monitor every three months as an investor only, and we hold periodic meetings with him, and he gets interest in return for the investment (if profits are recorded in the fund) of less than 5%, but we Independent decision ». The problem of “fresh dollar” transfers to the country, and credit for trade is the “argument” put forward by the “central” for not establishing the fund in Lebanon. This fund “charges less than 1% as administrative expenses and not 1.75%, in addition to which we transfer the profits that we achieve to the fund,” as Harqous explains.

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