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Wednesday, 3 August 2016

Ministers reveal more details on listing of state-owned companies

The IPOs of four state-owned electricity companies will include those managing three Siemens power plants, one each in Burullus, Beni Suef and the new capital, a source from the Electricity Ministry tells Al Borsa. NI Capital will establish the companies in three months’ time, with the Electricity Holding company retaining a 50% stake. As for the eight oil companies the Investment Ministry is presently thinking of listing? On the block are Middle East Oil Refinery (MIDOR) and the Egyptian Ethylene and Derivatives Company (ETHYDCO), Oil Minister Tarek El Molla told Reuters. He added that the ministry is considering a capital increase for companies Alexandria Mineral Oils Co. (AMOC), MIDOR, and Misr Fertilizers Production Company (MOPCO). El Molla told Al Borsa that Sidi Kerir Petrochemicals Co (Sidpec) would also list more of its shares on the EGX. A government source reports that oil companies will be the first to list.

As for the listing of 20% of Banque du Caire, no concrete steps have been taken yet, but Banque du Caire CEO Mounir El Zahid says the transaction could take place by the year’s end or in 1Q2017 and that it is an issue managed entirely by the CBE. Zahid also announced that the bank has approved an EGP 650 mn capital increase to be financed from retained earnings, adding that net profits in FY15 reached EGP 2.02 bn.

Investment Minister Dalia Khorshid revealed that companies under the Public Enterprise Ministry will not be part of the listing. Khorshid provided no background on the news, but Public Enterprise Minister Ashraf El Sharkawy has in past been a vocal opponent of “privatizing state assets.”

The president has been briefed on privatization of SOEs: Prime Minister Sherif Ismail briefed President Abdel Fattah El Sisi on plans for the economy, including a partial listing of “a limited number of state-owned companies” on the EGX before the end of the current fiscal year 2016-2017, according to a meeting readout from Ittihadiya. The statement hits all the expected highlights: Implementation of the reform agenda is proceeding, the president wants the PM to shelter low-income earners from its impact, and the civil service law (among others) is coming.

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