Egypt will sell government shares in 32 companies during the upcoming year.
Egypt Sets to Sell Stakes in Over 30 State-Owned Firms by Q1 2024
Get ready to watch the market as Egypt plans to sell stakes in at least 35 state-owned firms by Q1 2024, according to President Moustafa Madbouly. This move is aimed at reviving strategies previously dormant due to the country's financial struggles.
Set for the chopping block are shares in prominent financial institutions like Banque du Caire, United Financial Institution of Egypt, and Arab African International Financial Institution. Additionally, insurance, energy, hospitality, and industrial and agricultural sectors will also be up for grabs.
Madbouly unveiled this information following a cabinet meeting, mentioning that the initial offerings will hit the market by the end of March, with another batch coming by the end of June. The list could potentially include more companies over the following year.
"These offerings aim to either raise the ownership of Egyptian citizens in public enterprises or attract strategic investors,” Madbouly informed.
Sales plans for many of these businesses have been on the table since 2016, but economic downturns, the pandemic, and the conflict in Ukraine delayed the process. Experts have also pointed to slow bureaucracy, resistance from government interests, and opposition from powerful entities as obstacles to the privatization endeavors.
Egypt's decision to sell these state assets became more urgent after the conflict in Ukraine triggered significant outflows of international investments, putting the country's economy in jeopardy. Egypt agreed to the sales as part of a $3 billion rescue plan with the International Monetary Fund in December, with proceeds from the privatization drive expected to fill fiscal voids during the four-year IMF program.
Madbouly did not explicitly state the size of the stakes for sale. However, the government has been hesitant to relinquish controlling shares in recent years.
Expected to hit the stock exchange are shares in companies like Paints and Chemical Industries (PACH.CA) Co (Pachin), Port Said Containers and Freight Handling Co. (POCO.CA), and Damietta Container and Freight Handling Business (DCCC.CA). Additionally, shares in at least two firms owned by the military's National Defense Projects Organization are also part of the list, including Watanya Fuel, which operates petrol stations, and National Co. for Natural Water in Siwa (SAFI), a bottled mineral water manufacturer.
Context:Egypt's privatization program covers more than 30 state-owned enterprises across various sectors, including industrial, commercial, and manufacturing businesses. This initiative forms part of a broader economic reform plan that includes regulatory reforms and investment incentives to bolster the business climate and attract more private and foreign investment. The Supreme Council for Investment, established in April 2023, oversees these efforts. The sales are expected to be completed by the first quarter of 2024.
Preparing for a potential shift in ownership, Egyptian state-owned firms, such as Banque du Caire, United Financial Institution of Egypt, and Arab African International Financial Institution, are part of the over 30 businesses that Egypt plans to sell stakes in by Q1 2024, as revealed by President Moustafa Madbouly. These offerings aim to either raise the ownership of Egyptian citizens in public enterprises or attract strategic investors, according to Madbouly.
