Egypt’s famed military-owned ChillOut fuel station franchise will be privatised through an initial public offering (IPO), announced Minister of Planning and Economic Development Hala El-Said on 3 December.
The announcement, made during an interview with Asharq Business on the sidelines of COP28, marks a significant step in the country’s ongoing privatisation programme.
The transaction is expected to proceed following the sales of state-owned petrochemical firms and Wataniya fuel stations.
The government’s sale of Wataniya, initially slated for the end of December, will be delayed a further few weeks into the new year.
CHILLOUT’S CLIMB TO DOMINANCE
ChillOut fuel stations began spawning across the nation in 2018, having since become the fastest-growing fuel station franchise in the country.
As of May 2022, ChillOut operates 80 stations across the country.
Both ChillOut and Wataniya are owned by the Egyptian Army’s National Service Projects Organization (NSPO). The former is independently owned by the NSPO through its subsidiary, the National Company for Roads.
As implied by its name, ChillOut became renowned for transforming Egypt’s fuel stations into settings for social outings.
Most ChillOut stations constructed are accompanied by a small mall or a strip of commercial units, including bowling centres, barbershops, PlayStation cafes, restaurants, and even amusement parks.
It remains unclear whether the commercial areas neighbouring ChillOut stations are separate entities or not.
PRIVATISATION FUELED BY THE IMF LOAN
ChillOut joins a growing list of 35 crucial state-owned companies the government plans to offer stakes in by June 2024.
The government’s privatisation programme was created as a condition for receiving a USD 3 billion (EGP 68 billion at the time) loan package by the International Monetary Fund (IMF) in October 2022.
Despite expectations of receiving two additional tranches from the loan in March and September 2023, delays in the programme’s execution led the IMF to delay its loan review initially scheduled for September 2023.
A recent meeting with IMF Managing Director Kristalina Georgieva and Egyptian President Abdel Fattah Al-Sisi on the sideline of COP28 indicated that the loan review is expected to occur in the first quarter of 2024.
Egypt hopes to increase the loan package to USD 5 billion (EGP 154.7 billion).
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