Back to the complete issue
Wednesday, 25 January 2023

Gov’t to decide on hotel privatization within two months

The Madbouly government plans to reassess which state-owned hotels will be merged into a new hotels company ahead of an offering to foreign and Gulf investors, a source in government told Enterprise. A decision will be made on which hotels to include within 6-8 weeks, the person said, adding that the rethink was triggered by the devaluation of the EGP. The offering would be made to investors under a public-private partnership (PPP) arrangement, the source revealed.

REFRESHER- The government said last year that it would merge seven or eight state-owned hotels into a single entity to be offered up as part of the state’s privatization plans. Aswan’s Sofitel Legend Old Cataract, Cairo Marriott Hotel, Marriott Mena House, and Steigenberger Cecil Hotel Alexandria — which are all owned by the Holding Company for Tourism and Hotels (HOTAC) — were reportedly named by then-public enterprises minister Hisham Tawfik for inclusion.

Gulf funds are interested: The source declined to disclose the identities of the investors involved but said that most of the interest was coming from Gulf funds. His statements came following a report by Asharq Business that the Sovereign Fund of Egypt (SFE) is putting the finishing touches to a plan to offer a 30% stake in the new company, which it says includes seven state-owned hotels, to Gulf funds and investors during the first quarter of the year.

We know the PIF has shown interest: Last year, Tawfik disclosed that the Saudi sovereign wealth fund could acquire a 20% stake in the new company. The Public Investment Fund (PIF) was reported to be one of the most eager investors by Asharq yesterday.

This is part of the government’s privatization strategy: Global economic headwinds have pushed the government to accelerate its privatization drive. It is aiming to attract USD 40 bn of fresh foreign investment into the country over the next four years under a new strategy finalized at the end of last year.

A TREND EMERGES- We’re seeing plans to tender a number of big infrastructure, real estate and other large-scale projects pushed back as private companies and the government run their figures again in the wake of the EGP float.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.