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Tuesday, 10 April 2018

Will listed state-owned companies be prioritized in the state IPO program?

IPO WATCH- Will listed state-owned companies be prioritized in the state IPO program? The government may first sell new shares in listed state-owned companies in the state IPO program, Public Enterprises Minister Khaled Badawi implied in a call in to Hona Al Asema on Sunday (watch, runtime: 4:37). These listings, which are easier procedurally than IPOs, would include Alexandria Container & Cargo Handling Company (ACCH), Eastern Tobacco and Heliopolis For Housing & Development. His statements came in response to questions on which state company will pilot the program.

But all of this is up in the air still, as the timeline for the IPO program will be set by the government in two to three months, with the first wave of listings happening soon after, Badawi said. The Finance Ministry and NI Capital are coordinating with investment banks advising on the program on the timeline, he added. While the government did announce the list of 23 companies which will list on the EGX as part of the program, there has been much less clarity on schedule. EGX boss Mohamed Farid said that up to two state-owned companies would IPO this year, while Finance Minister Amr El Garhy had said that the government plans to offer shares from 4-6 companies on the EGX in 2018, including ones that are already listed.

As for the listing of ACCH shares, the government is planning to sell an additional 15% stake of the company, bringing the total percentage of free float shares to 20%, sources from parent company the Holding Company For Maritime & Land Transport told Al Mal. The holding company will sell 8.7% of its shares in ACCH (out of a total ownership stake of 55.8%), while the remaining 6.3% will come from the Alexandria Port Authority’s 40% ownership stake.

Reassuring public sector workers: Prime Minister Sherif Ismail promised that the state IPO program does not aim to cut public sector jobs in a statement issued on Sunday. Detractors of the program have been raising fears that it will lead to cutting state jobs.

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