The Central Bank (CBE) and the Union of Egyptian Investor Association (UEIA) have reportedly reached an agreement on rescheduling letters of credits (LCs) opened before the EGP float. The CBE will pay USD500mn to cover these open positions for companies with outstanding pre-float LCs worth less than USD5mn estimated at a total of 570 companies. These companies then would repay banks over periods ranging between two to seven years, depending on the company’s financial capacity. The interest rate would be 12% during the first two years, to increase annually during the following five years. Companies would be allowed to translate their USD debts to EGP at the prevalent exchange rate on the day their settlements were set. CBE has reportedly instructed banks to start drafting the debt settlement agreements today for two weeks, to refrain from taking legal action against companies, and to double the limits on future LCs. Discussion between the CBE and the UEIA are said to resume to find a solution for companies with debts exceeding USD5mn, members said. (Reuters, Al Borsa)