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Tuesday, 6 September 2022

Three GCC sovereign funds have their eye on TE’s stake in Vodafone Egypt

Could Telecom Egypt’s stake in Vodafone Egypt be in play? The Qatar Investment Authority (QIA), Saudi Arabia’s Public Investment Fund, and Abu Dhabi’s ADQ are all eyeing part of state-owned landline monopoly Telecom Egypt’s stake in Vodafone Egypt, a source with first-hand knowledge of the matter confirmed to Enterprise. Bloomberg Asharq reported earlier yesterday that QIA is looking to acquire as much as 25% of the company, citing three anonymous sources.

TE is open to selling up to a 20% stake in Vodafone Egypt “at the right price that would bring maximum returns to shareholders,” our source tells us. The EGX-listed telecoms giant holds a 45% stake in the company.

Nothing official yet: Talks are ongoing with the government — which owns 80% of EGX-listed TE — on the potential stake sale, the source said. TE has yet to receive an official bid from QIA or other sovereign funds, the company said in an EGX disclosure (pdf) yesterday.

TE shares rose 15.8% to EGP 17.70 in trading yesterday following its disclosure. The EGX suspended intraday trading TE shares for ten minutes before publishing the disclosure, it said in a bulletin (pdf).

QIA has reportedly been eyeing several Egyptian companies: The fund is rumored to be planning looking at the EGX as an entry point to deploy capital as part of moves by our neighbors in the region to help shore up our economy with an influx of FDI. Local media outlets have reported that the Qatari fund is interested in purchasing stakes in Alexandria Containers and Eastern Company, though a source at Eastern’s majority shareholder, Chemical Industries Holding (CIHC), denied knowledge of the talks when we reached out recently.

Other Arab sovereign funds have been buying big: The Saudi Public Investment Fund (PIF) and ADQ have invested bns of USD in a number of EGX-listed companies this year, with PIF reportedly still eyeing stakes in at least three high profile Egyptian companies. Gulf state neighbors have pledged more than USD 22 bn in total to support the economy amid the fallout from the crisis in Ukraine.

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