By Nader Ramadan and Nicholas Gerda
The credit crisis sweeping the globe has caught up with The American University in Cairo. In the past three months, officials said the school has suffered losses of almost $100 million in its securities investments.
At the end of August last year, AUC’s books were in good shape. The university had nearly $1 billion in total assets, according to its fiscal year 2007 report.
Over half of that—$520 million—was invested in stocks and bonds. The university also earned $77.8 million in tuition revenue, and owned over $35 million worth of investments in a variety of Egyptian firms.
But since that time, its securities holdings have suffered a net loss of nearly $120 million, said Alaa Shoreibah, Associate Vice President for Finance.
The market value of AUC’s holdings dropped 18 percent between August and October this year alone, Shoreibah said.
The market meltdown has complicated financial matters for AUC beyond just its market holdings, though. While most universities have frozen their capital projects because of credit shortages, work still continues on the new campus.
Costs associated with campus construction delays, additional operating expenses, and the market turmoil are a trio of concerns for AUC: in large amounts, it is losing money and having to spend money at the same time, when most institutions are reigning in expenses.
The university is beginning a three-year budget and planning process at the end of the month in response to the financial situation, Shoreibah said.
“The goal is to better align our financial resources with our new operating structure, now that we are at the new campus,” he said.
Read the full story in this week’s issue of the Caravan, out now.
3 Comments
October 27, 2008 at 11:43 am
I hope this s not an introduction to raising the fees next semester, enough is enough
October 27, 2008 at 7:39 pm
[...] laughing about the desert rats, you can read the surprisingly good investigative reporting in the AUC student newspaper about how the university, in the fine tradition of other over-extended American institutions these [...]
October 27, 2008 at 9:03 pm
donate to help poor AUC?