The Sovereign Fund of Egypt plans to take military-owned filling station Wataniya and bottled water company Safi public on the EGX before the end of 2022, according to a a cabinet statement. The two companies, which are owned by the military’s National Service Products Organization (NSPO), are currently being restructured ahead of their IPOs, the statement says. No details were provided on the size of the stakes the SFE plans to sell.

Let’s set some expectations, shall we? We don’t expect full-on IPOs this year for either company — it’s too late in the fall IPO window and market conditions are, at best, meh. Neither Safi nor Wataniya are in the market now, making it very difficult to see how we’d have an initial public offering of their shares. More likely, when you parse the cabinet statement, is that we’ll see the SFE push ahead with private stake sales — and that shares could be listed (but not offered to the public) as part of that sale.

Specifically: The SFE plans to drum up investor interest in the companies ahead of the IPOs, and is currently reviewing investor offers for strategic stake sales, according to the statement. The fund has pivoted to selling stakes to strategic investors and sovereign wealth funds this year in response to market turbulence and global economic volatility.

MUST-READ FOR CONTEXT- Stake sales on the private market are a great way to proceed if the Sisi administration’s goal is to maximize cash from the sale of assets, EFG Hermes investment banking boss Mostafa Gad told us last week. Having sold off a chunk of an asset in the private market, the state would then have the option of going ahead with an initial public offering down the road when market conditions are better and valuations are higher.

By order of the president: The ambition to float the companies this year was made clear in April when President Abdel Fattah El Sisi made the announcement as part of a speech laying out the government’s investment and privatization goals. Cabinet last mentioned the transactions back in July.

Background: The Madbouly government’s privatization plans had originally envisioned the selling of stakes in 10 state-owned companies and two military companies this year, but has since been scaled back in the face of market volatility. This is part of a wider plan to more than double the private sector’s role in the economy and raise USD 40 bn by 2026.