7 Egyptian moves to complete investment deals before the end of June

Egypt aims to raise two billion dollars from the government offering program, during the fiscal year 2022-2023, which ends in June.

After Egypt collected $175 million from the offerings, it aims to implement the exit deal for Government Telecom Egypt from Vodafone, sell the Beni Suef power station, or sell stakes from other companies, to achieve its urgent goal of raising two billion dollars from the asset management program.

Egypt offers 32 investment companies

During a press conference on February 8, 2023, the Egyptian Prime Minister, Dr. Mostafa Madbouly, said that his country is preparing different scenarios for the Egyptian economy, with the help of experts for the next two years in light of the extension of the repercussions of the Russian-Ukrainian crisis, and that 32 state-owned companies will be offered on the stock exchange or to a strategic investor over the course of the year. It includes 18 economic sectors and activities.

The prime minister added that his country targets 25% of these companies to end within 6 months, and that the companies that will be offered for the first time are companies in the field of electricity and insurance.

A $2 billion power station

"Actis" and "Edra Power" Holdings have once again expressed their interest in purchasing a major Egyptian power station, in a deal that may be worth two billion dollars, which could contribute to supporting the Egyptian economy that seeks to provide dollar liquidity, according to "Bloomberg".

The two companies intend to submit offers to acquire the largest possible share of the Beni Suef station, leading to full ownership, and obtaining the right to operate the facility located south of Cairo, after years of interest in the deal in 2019, and discussions took place at the time in this regard, but the agreement did not reach its conclusions.

Egypt targets $6 billion in offerings

Minister of Planning and Economic Development, Dr. Hala Al-Saeed, disclosed, in a statement on September 12, 2022, the details of establishing the sub-fund for government offerings on the stock exchange affiliated to the Sovereign Fund of Egypt, offering from 8 to 10 sub-fund companies, and they will be offered between the stock exchange and a strategic investor.

The minister said at the time that the government aims to achieve $6 billion from these proposals, and that the percentage of proposals ranges from 20% to 30% for a strategic investor.

Selling Telecom Egypt's share of Vodafone

The Egyptian government raised $175 million from the offering program by selling all of its shares in Pachin, and 10% of its shares in Telecom Egypt, at a value of $150 million, last month, but most of this value was in pounds, according to stock exchange disclosures.

On June 13, 2023, Egyptian newspapers revealed that Telecom Egypt, which is 70% owned by the government, intends to sell all of its 45% stake in Vodafone’s global unit in Egypt.

Negotiations are currently underway with the Qatar Investment Authority regarding the evaluation, and expectations indicate that it will reach $3 billion for the entire company, but the final evaluation has not yet been settled.

$12 billion investment

Egypt expects to attract foreign direct investment of $12 billion in the new fiscal year 2023-2024, an increase of 20% over the expected figures for the current fiscal year, according to Hossam Haiba, head of the Investment Authority, in statements to Al-Sharq Bloomberg, on June 12, 2023.

Figures in the budget for the new fiscal year 2023-2024 indicate that the Egyptian government is targeting additional proceeds of EGP 70 billion from government offerings, according to the financial statement published by Egyptian newspapers on May 9, 2023.

This outcome will be the offering of dozens of government-owned companies, whether on the stock exchange or to strategic investors, until next March 2024.

Egypt uses “international finance”

The Egyptian government signed an agreement with the International Finance Corporation (IFC) to act as a strategic advisor to the government to implement the government offering program.

The Egyptian Prime Minister, Dr. Mostafa Madbouly, said that the selection of the International Finance Corporation as a strategic advisor to the government for the offering program enhances the benefit from its accumulated experience in empowering the private sector in emerging markets.

Madbouly explained that the implementation of the advisory services agreement will be in close coordination with the government procurement unit in the Council of Ministers, with the aim of activating and accelerating the implementation of the procurement program for the private sector to attract foreign direct investment.

Ezz El Dekheila is on the investment radar

The Egyptian Stock Exchange suspended trading on the shares of "Ezz Dekheila" Steel Company - Alexandria.

The East Economy website reported news that the Sovereign Fund of Egypt had received the preliminary version of the evaluation of the “Ezz Dekheila Steel” company, in preparation for a possible sale of the government’s stake in it to Ezz Steel Company.

It is noteworthy that "Ezz Steel" owns 64% of the shares of "Ezz El Dekheila", while the Egyptian government's share is only 14%.