Egypt starts offering stakes in 2 State-owned firms as part of privatization drive. Egypt will start procedures on Wednesday to list two of its national army companies, Wataniya and Safi, on its stock exchange in an attempt to further develop its private sector, according to an official cabinet statement. The Associated Press has the story:
Egypt listing 2 state-owned Co. in Stock Market
Newslooks- CAIRO (AP)
The Egyptian government announced the start of listing procedures for “Wataniya” and “Safi” companies in stock exchange next Wednesday in an attempt to enhance its private sector, according to an official cabinet statement.
The spokesman of the Egyptian Council of Ministers, Nader Saad, said that it had been agreed to offer four other major companies through international investment banks, by the committee concerned with following up of the trading program. The statements noted that “the procedures for offering the two companies, Wataniya and Safi, will start through the offering advisor next Wednesday, who will communicate with the investors,” and reveal the companies’ data to the public.
The Egyptian Council of Ministers announced in a statement, on Sunday, that the trading process, which is supervised by the Sovereign Fund of Egypt, aims to maximize the value of the two companies and attract investors from the local or foreign private sector.
Wataniya, the national company for selling and distributing petroleum products, and Safi, the national company for bottling natural water are both currently owned by the Armed Forces’ National Service Projects Agency. Details regarding the offering process, whether it would be through a strategic investor, stock exchange, or a mix of both, were not mentioned. In addition, the offering of four major companies through international investment banks was approved, according to the cabinet statement.
Egyptian Prime Minister Mostafa Madbouly indicated the government’s keenness to follow up the executive steps of the proposals program, which was previously announced that comes within the implementation of the outputs of the State Ownership Policy document. This step eyes increasing the foreign investment rates and enhancement of the private sector participation of in the Egyptian economic growth.
Madbouly said more companies could be added to the initial public trading program.
Egypt’s plan to float shares of 32 companies
Around 32 state companies will either be listed on the Egyptian stock exchange or sold to strategic investors over the coming year, Prime Minister Moustafa Madbouly revealed in February earlier this year. Last February, Madbouly announced his government’s intention to offer 32 companies on the stock exchange or sell shares of them to major investors, over the course of a year starting from the first quarter of 2023 until the first quarter of 2024.
The government aims to exit from seven sectors, including pharmaceutical, chemical, and construction, besides reducing its investments in seven sectors, including power plants. Egypt also plans to provide an opportunity for the private sector to invest in four sectors.
First announced more than five years ago, the Egyptian government’s plan to sell stakes in public companies has gained new urgency since the Russian invasion of Ukraine. The war triggered heavy foreign investment outflows from the Egyptian financial markets and threw the African country’s economy into crisis.
Egypt in December agreed to a $3 billion rescue plan with the International Monetary Fund in expectation that the state withdraws from some non-strategic sectors of the economy to allow space for the private sector to grow.
Floating these institutions is one of the strategic goals under the State Ownership Policy Document which was approved by President Abdel-Fattah El-Sisi in December of last year.
The ownership document reported that the state intends to boost the private sector’s role in the country’s economic activities from 30 percent currently up to 65 percent within three years.
The move to offer these two companies reflects the government’s first step towards enforcing its announced plans of selling stakes in over 32 state-owned companies by March 2024. Madbouly added that the trading plan includes Cairo Bank, United Bank, Arab African International Bank, as well as Misr Insurance Company.
