Back to the complete issue
Monday, 19 November 2018

Egypt’s Eastern Tobacco stake sale is “in the offing” as share price recovers

IPO WATCH- Eastern Tobacco stake sale is “in the offing” as share price recovers: The sale by the state of an additional 4.5% stake in the Eastern Tobacco Company on the EGX is “in the offing,” Public Enterprises Minister Hisham Tawfik said yesterday, according to Al Mal. Tawfik did not disclose any further details, but said his ministry will discuss the matter with the transaction’s manager — EFG Hermes. The revival of the sale comes as Eastern’s share price has rebounded from its plunge in October, according to Chemical Industries Holding Company (CIHC) head Emad El-Din Mostafa. Regulations for the state privatization program bar any company from proceeding with a stake sale if its shares rise or fall beyond a threshold of 10% of its average value in the month preceding the transaction.

Background: The government had announced last month that the transaction — which is expected to pilot the privatization program — had been put on ice “indefinitely” after Eastern’s share price plunged as much as 11.5% in a week, pressured by the wider emerging market selloff, a high interest rate environment, a looming trade war, and the introduction of protectionist measures in various countries. Our sources had told us at the time that cabinet, while completely committed to the program, had made the decision to push the timeline after consulting with investment bankers. Tawfik had also said that the government would follow through with the listing as soon as market conditions improved.

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; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.