Abu Qir Fertilizers will sell an additional 10-15% of the company in a secondary offering on the EGX later this month, Enterprise has learned. Emad El Din Mostafa, head of Chemical Industries Holding Company, told us yesterday that a virtual roadshow targeting potential institutional investors is now underway and the transaction should close before the end of the year, confirming a timeline first disclosed by Public Enterprises Minister Hisham Tawfik last month.

The offering price hasn’t been determined yet: The price will be ±10% of the average share price during the 90 days prior to the sale, Mostafa said.

Years in the making: Abu Qir has pushed back the secondary stake sale several times since being announced in 2018, with the state’s privatization program suffering delays thanks largely to global market turmoil and then the pandemic.

Riding the e-Finance wave: Abu Qir would be the second state-owned company to tap the EGX this year, following in the footsteps of e-Finance, which completed the EGX’s biggest IPO in years in October, raising some USD 370 mn.

It’s not a bad time to be in the Egyptian fertilizer business: International fertilizer prices have been on a tear this year due to a combination of supply shortages, surging demand, and spiking energy costs. Where companies in other parts of the world are suffering through the energy crisis, Egyptian producers have been shielded due to the government’s price cap, which has helped Abu Qir capitalize on the high-price environment. The company reported a 30% rise in net income during FY 2020-2021, and saw its quarterly earnings almost double to EGP 1.3 bn in 1Q 2021-2022, which it attributed to higher international prices and strong demand.

We can expect more of the same in the coming months: The government last month allowed companies to hike their prices of subsidized fertilizer by 50% to EGP 4.5k per ton. This will help offset the higher natural gas prices, which were recently hiked by 28% by the government.

The impressive earnings haven’t been reflected in the company’s share price, which is down more than 9% year-to-date, closing yesterday’s session at EGP 18.8.

Abu Qir’s offering should kickstart more sales of stakes in other state companies as part of the resurrected state privatization program, Public Enterprises Minister Hisham Tawfik told Reuters last month, adding that four companies are expected to tap the local stock market in the first half of 2022.

e-Finance was the first of five state-owned companies that could tap the bourse before the end of the current fiscal year in June. Candidates for IPO include Ghazl El Mahalla football club (a small sale appealing to retail investors, but proof of concept for giant Al Ahly, which could follow) and Banque du Caire (a potential blockbuster with wide appeal). Alexandria Containers and Sidi Kerir Petrochemicals could also be in line for secondary sales.