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Wednesday, 18 July 2018

Gov’t names five companies to pilot privatization program

Gov’t names five companies to pilot privatization program: The Madbouly Cabinet announced the five state companies that will pilot the state privatization program on Tuesday. Alexandria Mineral Oils Company (AMOC), Eastern Tobacco, Alexandria Container and Cargo Handling, Abou Kir Fertilizers, and Heliopolis Housing will lead the program, according to a cabinet statement. As all the companies are already listed, this initial wave will only see share sales and no IPO. The cabinet had decided on the size of the stake sale as well as a timeline for the program at a meeting yesterday, but these were not announced. A source had told us last month that Eastern Tobacco will likely pilot the program in September with a 4% stake sale.

El Sisi pushed for the announcement: Finance Minister Mohamed Maait was supposed to have announced the program following a cabinet meeting this week or next. The cabinet’s statement from yesterday noted that President Abdel Fattah El Sisi had pushed for the announcement early.

Just in the nick of time? The announcement, which was long awaited, comes following numerous delays, which appear to have caused some consternation in the investment community. Egypt has the capacity to drum up enough interest to sell stakes from four major public companies on the EGX this year, but time is running short, Renaissance Capital MENA CEO Ahmed Badr told Bloomberg in an interview on Monday. The program was first teased back in 2016, with the government initially looking to launch the program in 2017.

More details to come? It had been widely anticipated that the announcement of the program will come with details on the timeline and the size of the stake sales. We expect these to come out sometime in the coming few weeks.

Heliopolis Housing prepares to hire investment bank to manage additional stake sale under state privatization program: State-owned Heliopolis for Housing and Development is in talks with a number of investment banks to manage upcoming stake sale on the EGX under the government’s privatization program, Vice President and MD Wael Youssef said yesterday, Al Mal reports. The list of names includes our friends at Pharos and EFG Hermes, as well as Beltone Financial, CI Capital, Arqaam, Eagle, and Al Ahly Capital, he said. The company will make a final decision by 31 August at the latest. Youssef did not specify the size of the stake sale. Heliopolis Housing currently has c. 27.6% of its shares listed on the EGX.

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