EXCLUSIVE: HHD 10% stake + management contract to be awarded at the end of January -Tawfik: NI Capital will choose by the end of January the strategic investor to take over management of Heliopolis Housing & Development (HHD) along with a 10% stake in the company, Public Enterprises Minister Hisham Tawfik told Enterprise. HHD Chairman Hany El Deeb said last week that the final contracts would be signed at the end of 1Q2020.

NI Capital invites investment banks to bid: NI Capital, the state-owned investment bank overseeing the government’s privatization program, has invited a number of investment banks to bid for the contract, banking sources told the local press. The banks are expected to submit offers individually or as part of a consortium within the next two weeks, the sources said, without disclosing the names of the banks.

Who do we already know is in the running? Eight companies were initially reported to have been interested in HHD, including SODIC, EFG Hermes, BPE Partners, Emaar Misr, and Orascom Development. Sources said that as of Thursday, only SODIC and BPE Partners had purchased the prospectus, which went on sale last Monday.

Bidders have until 1pm on 14 January to throw their hats into the ring and must submit any enquiries by 18 December.

The latest on the state privatization program: The Public Enterprises Ministry is choosing from a list of eight companies to IPO on the EGX, including e-Finance, Banque du Caire, and El Nasr Mining company, Tawfik told us. One of these companies might be offered before the end of the government’s current fiscal year in June 2020, he said, adding that the government plans to list several companies in 2020. Alexandria Container & Cargo Handling Company and Abu Qir Fertilizers are also ready to take secondary offerings to the market and are waiting on the investment banks quarterbacking the transactions, Tawfik said at a conference last week.

Some analysts are skeptical that the program can meet its targets: Reuters reports that analysts have raised doubts the Madbouly government can keep to its current timetable for the privatization program, citing constant delays for “flimsy” reasons. The government announced plans to privatize 23 companies back in March 2018, but until now Eastern Tobacco’s 4.5% secondary offering in March is only the one to go to market. “The successive postponement of the IPO weakens the government's position significantly and loses confidence in the program,” said Wael Enaba, chairman of Royal Brokerage, who notes the successful private sector offerings that have taken place this year.

The government has cited procedural delays and market uncertainty as reasons for postponing the sales. Radwa El Swaify, head of research at Pharos, says that the government should take a more proactive approach. “We need to energize the market through government offerings, rather than waiting for market activity,” she said.

The continued delays could hit investor sentiment, said Amr Ghallab, an MP who sits on the House Economic Committee. The government “should announce a clear timetable and a new timetable for the IPO program … When dealing with the capital market, transparency and clarity must be the master of the situation,” he said.

Still, we wonder: Have we not lost the plot with this constant hand-wringing about when the government will do an IPO or a secondary? First, nobody goes to market in adverse conditions — like when the EM Zombie Apocalypse bites or Aramco threatens to suck all the liquidity out of EM. Second, any policymaker (to say nothing of investment banker) who greenlights a transaction on a state asset that ultimately falls short of price expectations will be excoriated in the court of public opinion. And third, the only question that matters isn’t “when” the government pulls the trigger on the sales, but whether the companies themselves are serious about what it means to continue life reporting not to a holding company and “their” minister, but to public market shareholders.