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Tuesday, 12 March 2019

Banque du Caire IPO under Egypt’s privatization program postponed to 1Q2020

EXCLUSIVE- The IPO of state-owned Banque du Caire (BdC) could take place in 1Q2020, a senior government official told us. Officials are discussing whether to push the transaction to the start of next year as the bank wraps up settlements and paperwork that make it difficult to carry out a stake sale at the same time, our source said without providing further details. CEO Tarek Fayed had said in December he expected the IPO could take place in 2019, but flagged that final timing would be subject to market conditions. A senior bank official told is last August that BdC would float up to 30% of its shares in the IPO, which comes as part of the state privatization program.

Proceeds from the privatization of state companies will be divided between the state treasury, shareholders, and debt repayment, our source tells us. The debts include dues owed to state utility companies for water, electricity, and gas, as well as to the National Investment Bank. A committee comprised of the finance and public enterprises ministers, and the minister in charge of each company’s industry, will figure out the use of proceeds from each transaction.

Background: Public Enterprises Minister Hisham Tawfik told us earlier this month that the next wave of offerings will be new listings. The ministry plans to IPO four or five state companies at a rate of about one per month starting September. The government is also expected to announce an updated list of the companies on the roster, Tawfik said, after the state kick-started the program last week with the sale of an additional 4.5% stake in Eastern Company.

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