Egypt’s government signed contracts worth a total of USD 1.9 billion (EGP 58.7 billion) to sell stakes in state assets, announced Prime Minister Mostafa Madbouly in a press conference.
This is the government’s first major step in its plans to stimulate the private sector and generate much-needed hard currency. The move also aligns with the conditions set in its loan agreement with the International Monetary Fund (IMF) approved in December 2022.
USD 1.65 billion (EGP 50.9 billion) of the contracts will be paid in foreign currency, boosting the country’s foreign reserves and easing the prolonged pressure on the Egyptian pound.
The government’s latest sale is considered the second wave of the privatization program, having already sold stakes in Paint and Chemicals Industries and Telecom Egypt for a collective total of USD 147.5 million (EGP 4.4 billion) on 15 May.
WHAT WAS SOLD?
The Egyptian government sold stakes in three state assets comprising drilling, steel, petrochemical companies, and state-owned hotels, announced Minister of Planning and Economic Development, Hala El-Said, in the same press conference.
Stakes ranging from 25 to 30 percent in petrochemical state companies, ETHYDCO and ELAB, and drilling company, National Drilling, were offered to Abu Dhabi Fund for Development at a USD 800 million (EGP 24.7 billion) evaluation.
Around 37 percent of the state-owned Egyptian General Company for Tourism and Hotels (EGOTH) worth USD 700 million (EGP 21.6 billion) was offered to Icon Investments, a subsidiary of Talaat Mostafa Holding, and a partnering foreign company.
The government also sold its complete 31 percent stake in Ezz Steel subsidiary Al Ezz Dekheila for USD 241 million (EGP 7.4 billion). The state-owned stake will now be re-acquired by Ezz Steel.
An additional USD 250 (EGP 7.7 billion) million were collected from further share sales in Telecom Egypt.
Egypt’s government initially aimed to raise USD 2 billion (EGP 61.7 billion) from stake sales by the end of June in a bid to combat a shortage in foreign exchange and the rise of the parallel market.
The World Bank’s International Finance Corporation, which joined as Egypt’s strategic advisor in privatization, will consult the government in preparing 50 more companies.
The government expects to complete several transactions in the coming months, including a deal worth USD 3 billion (EGP 92.8 billion) for 21 state-owned water desalination plants, and more than USD 300 million (EGP 9.2 billion) for the Gabal El-Zeit wind plant.
There are also plans to sell stakes in Armed Forces-owned Wataniya Petroleum and a power plant built by Siemens.
The prime minister added that more deals worth USD 1 billion (EGP 30.9 billion) would be announced soon, without specifying an exact date.
The country aims to increase its annual inflow of hard currency by USD 70 billion (EGP 2.1 trillion) per year to reach USD 191 billion (EGP 5.9 trillion) by 2026, announced Madbouly.
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