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Monday, 9 March 2020

Banque du Caire is on track to debut in April, interest building up for military privatization

PRIVATIZATION WATCH- Banque du Caire is on track to debut in April (for now): The state-owned Banque du Caire (BdC) is moving ahead with its plans to IPO 20-30% of its shares on the Egyptian Exchange in April, Al Masry Al Youm quotes CEO Tarek Fayed as saying in a press conference on Saturday. “It is premature to determine the impact of global and regional developments on the offering,” Fayed said. He noted, however, that BdC’s management is ready to change up the plan and “make necessary decisions” if global headwinds should force them to rethink the timeline.

Background: BdC aims to raise some USD 500 mn from its debut on the EGX by April. The timing could be critical given the impact of the covid-19 on global, regional, and domestic markets but sources had said a final decision would be reached by next week. The bank's two-legged roadshow was described as a success by the bank's officials and at least three major ‘anchor investors’ have been reported to be interested, including the European Bank for Reconstruction and Development, the Sovereign Fund of Egypt, and Abu Dhabi Development Holding though Fayed said that a single investor will not be permitted to own more than 5% of the bank.

In related news: SFE head says investors interested in military-owned firms: Local and international investors have expressed interest in companies currently owned by the Egyptian military, Sovereign Fund of Egypt (SFE) CEO Ayman Soliman told Hapi Journal on the sidelines of a conference hosted yesterday by the Egyptian Junior Business Association. Soliman told the FT earlier this month that the fund was looking into offering up to 10 army companies for co-investment. This came a month after the SFE signed an agreement with the military’s National Service Products Organization (NSPO) to market some of its subsidiaries to private investors. “They [the NSPO] said we are happy to exit those assets up to 100%,” Soliman told the FT.

Also coming from Soliman on the sidelines of the conference:

  • The SFE will sign a partnership agreement with an unnamed local private investor “within weeks,” Soliman told Hapi Journal without naming the investor, noting only that this will be the first partnership the fund enters into as part of its mandate to further public-private cooperation;
  • The fund will start running a surplus within five years and will then look to invest in assets abroad;
  • Soliman gave assurances that the fund will not crowd out private investment, saying that the SFE’s key aim is to give private sector players more investment prospects; and
  • The fund aims to acquire and manage EGP 80 bn-worth of assets, he said without providing a time period.

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